Because Tencent (0700.HK) breaks down its quarterly earnings between Internet value-added services, mobile and telecommunications value-added services, online advertising and "other", people do not usually think of the company as an online game company. Tencent reports its games revenue as a part of its Internet value-added services revenues.

However, when you compare Tencent’s online game revenues to those of Perfect World, a Nasdaq-listed online game company, the results are surprising.

Tencent fourth quarter online game revenues: US$39.8 million, up 22.2 percent quarter-on-quarter.

Perfect World fourth quarter online game revenues: US$35.4 million, up 20.8 percent quarter-on-quarter.

Tencent Games, better known as QQ Games, is bigger than Perfect World in terms of revenues. QQ Games includes MMORPGs (QQ Fantasy, QQ Sanguo and QQ Huaxia), advanced casual games (QQ Speed and QQ Dance) and the casual game platform QQ Game which recorded 3.8 million peak concurrent users (PCU) in the fourth quarter. The well-diversified online game portfolio and QQ brand make Tencent a successful online game company.

"QQ" is an absolutely golded brand; Tencent even plans to rename its licensed Korean fighting game Dungeon and Fighter as QQ Fighter.

Tencent plans to release three MMORPGs and three advanced casual games in 2008. Competitors should watch out; Tencent is a tough competitor in every Internet business it enters with its 300 million active QQ IM users.

I wouldn't be shocked if Tencent lists its online game business separately in the future.