Tencent Holdings Ltd. posted a quarterly profit that missed analysts’ estimates after it spent heavily on cloud and mobile payments businesses to offset a gaming slowdown.

Net income fell 39% to 14.2 billion yuan ($2.1 billion) in the three months ended December. That compares with the 17.55 billion-yuan average of estimates compiled by Bloomberg. Adjusted earnings-per-share were 2.07 yuan, compared with the 1.83-yuan projected.

China’s social media leader is enduring one of its darkest periods, as a months-long freeze on game approvals derailed its core business over much of 2018. The social media titan is also grappling with an economic slowdown that’s depressing advertising. It’s turned to spending to sustain growth, investing in everything from cloud computing and entertainment to retail, locking horns with Alibaba Group Holding Ltd.

“We don’t expect leaders Tencent and NetEase to achieve the high growth rates of the past," Bloomberg Intelligence analyst Vey-Sern Ling wrote in a pre-results report. “While the freeze was the main reason for the drop, it masked rising China market saturation, and to a lesser extent slowing smartphone sales growth and broader macroeconomic weakness."

Tencent is said to be clearing out about 10% of managers to make room for younger executives as it confronts a slowdown in growth. Revenue rose 5% to 84.9 billion yuan, versus estimates for 83.4 billion yuan.

Its shares fell 1.9% on Thursday in Hong Kong ahead of the earnings announcement. They’re up 16% this year, compared with a 32% rise for New York-listed Alibaba.

This story has been published from a wire agency feed without modifications to the text.