July 27 (NBD) -- A number of investment banks, including Swiss UBS and Credit Suisse and Japanese Nomura and Daiwa Securities, recently trimmed their target prices for Tencent's stocks based on a predicted weaker online gaming revenue during April-June period for the Chinese tech behemoth. 

Both Credit Suisse and Nomura forecast that the tech giant's second-quarter revenue from mobile games will decline by around 20 percent from the previous quarter to roughly 17 billion yuan (2.5 billion U.S. dollars). And Daiwa Securities Group projected a 7 percent sequential decrease in the metric.

UBS predicted Tencent's second-quarter revenue from the mobile and PC gaming business would fall by 9 percent from the previous quarter.

Credit Suisse pointed out the internet juggernaut's new mobile games like PlayerUnknown's Battlegrounds have yet to bring considerable revenue, and current hit games such as King of Glory lack key updates to attract users. Plus, the second quarter is a traditional low season for the gaming industry. 

Meanwhile, Tencent is also facing great pressure on the PC game side. 

It has been almost half a year since the tech company announced its plan to bring PlayerUnknown's Battlegrounds to PCs, but the plan is still waiting for the regulatory approval. 

The new tournament-style game Fornite is a big hit, but is yet to be a major revenue driver for Tencent as the company only has the rights to run the game in China. 

At the first-quarter financial results conference call, Tencent President Liu Zhiping shared his insights on the development of the gaming business. He said revenue from PC games would likely go downhill and mobile games would grow into a key revenue source for the company in the future. 

Moreover, he held e-sports was probably the most promising model after mobile game in the gaming industry in the past five years and will bring more users to Tencent.

Apart from Tencent, other game companies like NetEase and KingSoft also faced reduced forecasts by investment banks on their game revenues. 

Deutsche Bank slashed its prediction for NetEase's gains from mobile games for the January-June period to around 9.7 billion yuan (1.4 billion U.S. dollars) from the previous 9.9 billion yuan (1.5 billion U.S. dollars) due to the worse-than-expected performance of the company's online game A Chinese Ghost Story. 

In fact, NetEase presented a lackluster performance in the first three months of this year, and its net income from online games was about 8.8 billion yuan (1.3 billion U.S. dollars), down 18.4 percent from the same period of a year earlier. 

Behind these companies' predicament is the growth slowdown of the entire game market. 

Data from the Ministry of Industry and Information Technology shows the growth rate of network games revenue in China in the first five months of 2018 slackened by 6.3 percentage to 24.5 percent compared with same period of last year.

Email: lansuying@nbd.com.cn