Tencent’s strategic roadmap is anchored in three interlocking pillars: the expansion of live‑service ecosystems, the integration of artificial‑intelligence tools across development pipelines, and the cultivation of evergreen intellectual properties that can sustain long‑term player engagement. In a recent, in‑depth interview, Yong‑yi Zhu, Vice President and head of Operations, Strategy and Compliance for Tencent Games, laid out how the company is balancing these ambitions while navigating the complexities of a rapidly evolving global market. ### Live‑Service as a Core Driver, Not a Sole Focus Zhu openly acknowledges that live‑service models represent the "holy grail" for Tencent.
He points to the company’s DNA—titles such as *Honor of Kings*, *League of Legends* and *Valorant*—as living proof that games that evolve over time can generate stable revenue streams and foster vibrant, lasting communities. However, he stresses that live service is only one facet of a broader strategy.
"We look for games that become a lifestyle for players, not just a fleeting experience," he says, emphasizing that the goal is to embed games into daily routines. The live‑service approach has its risks. Recent high‑profile failures, such as the ill‑fated *Highguard* project backed by Tencent’s TiMi Studio Group, illustrate that not every title can sustain a continuous content pipeline. Yet Tencent remains undeterred, believing that the potential upside outweighs the occasional setback.
The company’s portfolio is deliberately diverse, with both live‑service and premium, one‑off experiences, allowing it to hedge against market volatility. ### Portfolio Rationalisation and Studio Autonomy Since the last interview a year ago, Tencent has reshaped its studio landscape. UK‑based developers Splash Damage and Bulkhead have spun out as independent entities, following earlier separations of The Chinese Room and Secret Mode in 2025. Zhu explains that these moves are driven by a simple question: "Does the partnership add value for both sides?" When the answer is no—whether due to strategic misalignment, cultural friction, or better opportunities elsewhere—Tencent prefers to let studios thrive on their own.
He notes that some studios are "better standalone than they are with Tencent," underscoring a pragmatic approach to acquisitions. Integration challenges are inevitable.
Zhu admits that market conditions and cultural differences sometimes impede smooth assimilation of newly acquired studios. "Not everything is a slam dunk," he says, acknowledging that a measured, case‑by‑case assessment is essential for long‑term success. ### Evergreen IPs and Sustainable Communities Beyond live‑service, Tencent places a premium on evergreen IPs—games that can evolve across multiple iterations while retaining a loyal fan base.
The company cites *Call of Duty* as an exemplar: each yearly release builds on a proven formula, keeping the franchise perpetually relevant. Tencent aims to replicate this model by nurturing titles that can transition from single‑player experiences to multiplayer ecosystems, thereby extending their lifespan and revenue potential. Stability is a recurring theme. Zhu contrasts Tencent’s approach with the boom‑and‑bust cycles seen at other premium studios, where a single hit can trigger massive layoffs when the next project stalls.
Tencent seeks to smooth out these peaks and troughs by fostering consistent community engagement and steady content updates. ### Talent Investment and Synergistic Partnerships A second cornerstone of the strategy is the acquisition and development of high‑quality talent. Zhu stresses that any partnership must be mutually beneficial: "We bring something to the table, and the developers bring something to the table." Tencent’s global studio roster—spanning Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios, Digital Extremes, and Grinding Gear Games—reflects this philosophy. The focus is less on geographic expansion and more on ensuring each studio receives the support it needs to launch and sustain successful products.
Support mechanisms include regional publishing expertise, technical assistance, backend services, testing, and data analytics. Zhu recounts a concrete example: experts from China and Europe collaborated on *Dune Awakening* alongside Funcom’s team, providing on‑the‑ground problem solving and, in some cases, transitioning into permanent hires. While creative direction remains the studio’s domain, Tencent steps in on cross‑cutting challenges such as Unreal Engine optimisation or navigating publishing in MENA and Southeast Asia. ### Scale Flexibility: From AAA to Indie When asked about the size of projects Tencent is willing to back, Zhu dispels the myth that the company only pursues billion‑dollar ventures.
He explains that Tencent evaluates games across a spectrum of scales, focusing on the studio’s stage in its development journey and its long‑term aspirations. "We have small games in our portfolio," he says, citing investments in studios like Larian and FromSoftware—both minority‑stake holdings that have produced a mix of modest‑budget and blockbuster titles.
The emphasis is on craftsmanship and audience growth rather than sheer budget. ### Cross‑Regional Collaboration and Outsourcing Models Zhu acknowledges that integrating Chinese and Western operations has proven more challenging than anticipated, largely due to time‑zone differences. Consequently, the focus has shifted toward disseminating best practices across the network rather than building a unified support hub. He envisions a hybrid model where core teams are supplemented by external specialists—a strategy that proved effective for *Star Wars: Galactic Racer* and is being considered for upcoming projects like *Expedition 33*.
Outsourcing decisions are guided by location, cost, and expertise. For European studios, Sumo Digital may provide regional support, while UK‑based teams weigh the trade‑off between proximity and expense. This nuanced approach mirrors broader industry trends highlighted by Amir Satvat at Gamescom Dev, where development talent is migrating from high‑cost regions like California to more affordable hubs across Asia. ### AI as an Enabler, Not a Replacement A recurring thread in Zhu’s commentary is the role of artificial intelligence.
He frames AI as a productivity enhancer rather than a substitute for human creativity. "AI helps us iterate faster, produce higher‑quality assets, and streamline processes like rigging, motion matching, and code review," he explains. Chinese developers, accustomed to leveraging cutting‑edge tools, are particularly adept at integrating AI into their pipelines, narrowing the quality gap between mobile and console/PC productions. In the West, AI adoption is slower due to ethical, copyright, and player‑backlash concerns.
Zhu urges developers to shed their apprehension: "People should just not be afraid of AI; it’s like the internet—an inevitable tool that can make us more efficient." He stresses that Tencent promotes AI usage while safeguarding intellectual property. All AI tools employed are confined to internal data sets, and contracts with providers prevent external leakage of proprietary assets.
### Looking Ahead: Engagement at the Core Ultimately, Zhu’s vision circles back to a single metric: player engagement. Whether through live‑service updates, evergreen franchise expansions, or AI‑driven development efficiencies, the aim is to keep gamers invested and entertained.
"The more people love your game, the more they’ll play it," he concludes, linking enjoyment directly to financial performance. Tencent’s expansive backing allows it to experiment across a wide gamut of scales and genres. While recent divestments—such as the spin‑offs of Bulkhead and Splash Damage—signal a willingness to prune non‑aligned assets, the company’s recent minority investment in W4, a commercial partner for the Godot engine, suggests continued interest in fostering innovative tooling ecosystems. As the next Gamescom approaches, Zhu is likely to showcase new initiatives that further blend live‑service dynamics, AI‑enhanced production, and timeless IP development, all aimed at sustaining long‑term player engagement worldwide.