Tencent, the China-based social network, communications, and gaming company, continues to bring in staggering revenue, comprised mostly from the sale of virtual goods. In the second quarter, the company reported revenues of $421 million, a 14 percent increase from the previous quarter. From the same time last year, it represents a remarkable 79 percent increase.

Categorized “internet value added services,” virtual goods accounted for $315 million in revenue in the second quarter. That’s a 13 percent increase from last quarter, and a year over year increase of about 108 percent. Individually, most Tencent virtual goods aren’t that expensive, with many ranging from 10 cents to a $1. Players of social games use them to purchase avatars, pets, accessories, and a variety of other goods using a virtual currency that Tencent manages.

In Asia, the growth in the virtual goods market has been nothing short of astonishing. As we reported in April, it’s estimated that the Asian market for virtual goods sits at around $5 billion, a figure that is around 25 times larger than the approximate $200 million in the United States. In China alone, Pearl Research estimated that online gaming revenues in China weighed in around $2.8 billion. Of that total, 70 percent of that being generated through virtual goods.

Other areas of Tencent’s business experienced growth as well. Its online advertising revenue, an area of the gaming market that has been much more volatile due in part to the recession, reached $35 million, an increase of 65 percent from the last quarter and nine percent since last year. But in the company’s earnings statement, Ma Huateng, chairman and CEO of Tencent, made no mistake where the company sees its future and continued growth.

“We strengthened our online platforms and increased monetization on our Internet value-added services, especially online games,” he says. “For our online advertising business, the industry environment remained challenging, although activities picked up modestly this quarter. We believe advertisers are still cautious on ad spend for 2009 until the global economy recovers in a more concrete and sustained manner.”

Virtual goods sales in the United States are growing quickly as well, especially within social games on Facebook and MySpace. Other social networks, like hi5, have staked a big portion of their future revenue opportunities on virtual goods as well.