Tencent’s overarching plan for the future of gaming revolves around three interlocking pillars: live‑service experiences, advanced AI tools, and the cultivation of evergreen intellectual property. In a recent, in‑depth interview, Yong‑yi Zhu, Vice‑President and head of Operations, Strategy and Compliance for Tencent Games, painted a picture of a company that is still very much committed to the live‑service model, but that also recognises the limits of a one‑size‑fits‑all approach. Zhu began by acknowledging the mixed results that other publishers have seen when they chased recurring‑revenue models. Sony, for instance, took a gamble on live‑service concepts that ultimately fell short, and many other firms have stumbled while trying to emulate the steady cash flow promised by games‑as‑a‑service.
By contrast, studios such as Capcom, which have largely stuck to a more traditional release cadence, have weathered the market turbulence with less disruption. Even within Tencent’s own ecosystem, there have been setbacks. The now‑defunct Highguard, reportedly backed by TiMi Studios, serves as a cautionary tale of a live‑service title that failed to gain traction.
Nevertheless, Zhu insists that live service remains "the holy grail" for Tencent. He points to the company’s DNA—flagship titles like Honor of Kings, League of Legends and Valorant—as proof that games which evolve over time, nurture communities and become part of players’ daily routines are the most sustainable. "It’s not just about a burst of excitement for a few weeks; it’s about building a lifestyle," he explained. This philosophy informs Tencent’s sprawling portfolio, which is designed to support long‑term engagement across multiple platforms and regions.
Live service, however, is only one strand of the broader strategy. Zhu highlighted that Tencent has been re‑evaluating its studio relationships.
Over the past year, UK‑based studios Splash Damage and Bulkhead have spun out as independent entities, following earlier separations of The Chinese Room and Secret Mode. While Zhu declined to discuss the specifics, he noted that Tencent will only retain partnerships where there is clear mutual benefit and strategic alignment.
"If the synergy isn’t there, or if the studio can thrive better on its own, we step back," he said. He also admitted that not every acquisition works out smoothly; cultural differences and shifting market conditions can make integration challenging. Evergreen titles—both single‑player and multiplayer—are another cornerstone of Tencent’s plan.
The company aims to nurture games that continue to attract players long after launch, creating stable revenue streams and reducing the boom‑and‑bust cycles that have plagued many developers. Zhu cited Call of Duty as an example of an evergreen IP that, despite being released as a series of sequels, maintains a consistent audience and revenue base. Stability is a recurring theme.
Zhu contrasted Tencent’s approach with the historical pattern of premium games that experience sharp peaks followed by layoffs. By focusing on long‑term community building, Tencent hopes to avoid those fluctuations and provide a more predictable environment for its studios.
Talent acquisition is the second major pillar. Zhu stressed that Tencent looks for high‑quality developers whose strengths complement the company’s own capabilities. The global division he oversees includes roughly twenty studios, ranging from Miniclip and Sumo Digital in Europe to Digital Extremes in North America and Grinding Gear Games in New Zealand.
Rather than dictating creative direction, Tencent offers support in areas such as regional publishing, technical infrastructure, testing, backend services and data analytics. He illustrated this with a concrete example: experts from China and Europe collaborated directly with Funcom’s team on the live‑service title Dune Awakening, even staying on‑site to troubleshoot persistent issues and, in some cases, transitioning to permanent staff. When asked whether Tencent is shifting its focus toward larger live‑service projects at the expense of smaller, premium titles, Zhu responded that the decision is studio‑specific. Funcom, for example, had already been running Conan Exiles as a live‑service game before Tencent’s investment, so the partnership naturally leaned toward supporting that model.
Other studios that experimented with live service but found it unsuitable have reverted to their core strength—high‑quality, premium experiences. The size of a project does not automatically disqualify it from Tencent’s interest. While Bulkhead’s CEO once suggested that Tencent would only consider games with budgets exceeding £50 million, Zhu clarified that the company evaluates opportunities across the entire spectrum.
"It’s more about where the studio is on its journey and what its ultimate destination looks like," he said. He cited Larian Studios and FromSoftware—both minority‑owned by Tencent—as exemplars of studios that have built a catalog of purposeful games over time, regardless of individual titles’ scale. Outsourcing and hybrid development models also feature prominently in Tencent’s roadmap.
Zhu described a scenario where a core team is supplemented by external specialists for high‑precision tasks, a method that proved effective for titles like Star Wars: Galactic Racer and is being explored for upcoming projects such as Expedition 33. Geographic considerations play a role, too; while the UK offers proximity for European studios, its higher cost base forces Tencent to weigh trade‑offs between talent concentration and budget efficiency. The conversation then turned to the broader industry shift toward Asian development hubs. Zhu observed that Chinese studios, historically known for mobile expertise, are now producing console‑level quality, citing the impact of games like Black Myth: Wukong.
Improved tooling, especially AI‑driven solutions, has lowered barriers and accelerated iteration. Zhu emphasized that AI is viewed as an enhancer rather than a replacement: it helps smaller teams achieve higher output, streamlines concept art, rigging, motion matching, code review and even project‑management tasks via intelligent bots. Despite the enthusiasm, Zhu acknowledged lingering challenges, particularly around copyright and the provenance of AI‑generated assets.
Tencent mitigates risk by restricting AI tools to internal data sets, ensuring that generated content remains within the company’s IP boundaries. Agreements with tool providers further guarantee that proprietary data does not leak externally.
In summary, Tencent’s long‑term strategy is a balanced blend of live‑service ambition, AI‑enabled efficiency, and the cultivation of timeless franchises. By fostering synergistic studio relationships, investing in top‑tier talent, and leveraging cutting‑edge technology, the company aims to keep players engaged for the long haul—an approach that ultimately translates into sustained financial performance and a resilient position in the global gaming ecosystem.