Tencent’s strategic outlook is built around three interlocking pillars: the pursuit of live‑service experiences, the integration of advanced AI tools, and the cultivation of evergreen intellectual property that can sustain long‑term player communities. In a recent in‑depth conversation, Yong‑yi Zhu, Vice‑President and head of operations, strategy and compliance for Tencent Games, laid out how these elements shape the company’s global portfolio and its approach to studio partnerships. ### Live‑Service as a Core Objective, Not a Sole Focus Zhu described live‑service as the "holy grail" for Tencent, pointing to the company’s DNA—titles such as *Honor of Kings*, *League of Legends* and *Valorant*—that continuously evolve and keep players engaged over years.
These games generate recurring revenue streams and foster vibrant ecosystems that extend beyond a single launch window. However, Zhu was quick to stress that live‑service is only one facet of a broader, diversified strategy.
While Tencent continues to back projects that promise ongoing content updates and community growth, it also recognizes that not every acquisition will fit this model. The recent fallout of the live‑service title *Highguard*, reportedly supported by Tencent’s TiMi Studio Group, illustrates the risks inherent in chasing perpetual monetisation.
Yet the company remains undeterred, believing that the long‑term stability offered by live‑service models outweighs occasional setbacks. Zhu explained that the firm evaluates each partnership on whether both sides bring complementary strengths to the table.
When synergy is lacking—whether due to misaligned market positioning or cultural mismatches—Tencent may allow a studio to spin out, as it did with UK‑based Splash Damage and Bulkhead earlier this year. ### Evergreen IP and Sustainable Communities Beyond live‑service, Zhu highlighted the importance of evergreen titles—games that retain relevance through regular updates, expansions, or sequels. Whether single‑player experiences on mobile platforms or multiplayer ecosystems on PC and consoles, the goal is to build durable communities that keep players returning. He cited *Call of Duty* as an example of an evergreen franchise that evolves iteration after iteration while maintaining a consistent brand identity.
Tencent’s acquisition strategy reflects this philosophy. The company holds minority stakes in studios such as Larian Studios and FromSoftware, which have demonstrated the ability to grow their IPs gradually while preserving quality. These investments illustrate that Tencent values studios that can nurture a dedicated audience over time, regardless of the scale of individual releases.
### Global Studio Network and Tailored Support Zhu oversees roughly twenty studios worldwide, including Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios, Digital Extremes, and Grinding Gear Games. Rather than imposing a one‑size‑fits‑all model, Tencent offers a menu of services—regional publishing, technical assistance, backend infrastructure, analytics, and quality assurance—to help each studio succeed in its specific market. A concrete example is the collaboration on *Dune Awakening*.
Experts from Tencent’s Chinese and European teams worked side‑by‑side with Funcom developers, troubleshooting engine issues and providing on‑the‑ground support. In some cases, these consultants transition into permanent roles within the studio, reinforcing the partnership’s long‑term nature. While creative direction largely remains with the individual studio, Tencent steps in when common challenges arise, such as optimisation of Unreal Engine pipelines or navigating publishing regulations in the MENA region.
### Flexibility in Project Scale When asked about the minimum size of projects Tencent would consider, Zhu dismissed the notion of a hard financial threshold. He argued that the company evaluates opportunities based on the studio’s developmental stage and strategic fit rather than a fixed budget figure. Smaller titles can coexist alongside blockbuster franchises in Tencent’s portfolio, provided they align with the company’s broader objectives of quality and community building.
### The Role of AI as an Enabler, Not a Replacement AI tools feature prominently in Tencent’s vision for the future of game development. Zhu stressed that AI should be viewed as a productivity enhancer—helping teams generate concept art, automate rigging, improve motion matching, and streamline code reviews—rather than a substitute for human talent.
He described how AI can empower smaller teams to punch above their weight, allowing a studio of thirty or forty developers to produce content that rivals larger competitors. Tencent also takes a cautious approach to AI‑generated content, ensuring that any data used by generative models remains within the company’s own IP libraries. Agreements with tool providers prevent external leakage of proprietary assets, safeguarding against inadvertent copyright conflicts. This internal‑first policy reflects a broader industry conversation about the legal and ethical implications of AI‑driven creation.
### Talent, Culture, and Geographic Considerations Investing in high‑calibre talent remains a cornerstone of Tencent’s strategy. Zhu emphasised that successful collaborations hinge on cultural compatibility and mutual benefit.
The company is actively exploring hybrid development models where a core internal team is supplemented by external specialists—a method that proved effective for titles like *Star Wars: Galactic Racer* and the upcoming *Expedition 33*. Geography also influences outsourcing decisions. While UK‑based Sumo Digital may support European studios due to proximity, cost considerations and time‑zone alignment are constantly weighed.
The shifting landscape of development hubs—where high‑cost regions like California see talent migration toward Asia and other emerging markets—mirrors broader industry trends highlighted at Gamescom Dev. ### Looking Ahead: A Balanced Portfolio Tencent’s recent minority investment in W4, the commercial partner behind the Godot engine, signals an ongoing commitment to diversify its holdings across both AAA and indie‑scale projects. The company’s overarching aim is to keep players engaged, whether through live‑service updates, evergreen sequels, or innovative new experiences powered by AI and cross‑studio collaboration.
In Zhu’s own words, "At the end of the day, I sit in games, which is part of a bigger Tencent ecosystem, and my purview is always about how do we keep people engaged, make sure that they're having fun. Because, to put it plainly, the more people love your game, the more they’ll play it, and that translates directly to the bottom line."