Tencent’s overarching plan for the future of gaming revolves around three interlocking pillars: live‑service ecosystems, advanced AI tooling, and the cultivation of evergreen intellectual property. While many industry observers have debated the wisdom of betting on live‑service models—citing Sony’s high‑profile missteps and the mixed fortunes of other studios—Tencent remains convinced that the approach offers a reliable revenue stream and a way to embed games into players’ daily routines. Yong‑yi Zhu, Vice‑President and head of operations, strategy, and compliance for Tencent Games, summed it up succinctly: “Our holy grail is live service.” He points to the company’s flagship titles—Honor of Kings, League of Legends, and Valorant—as exemplars of games that evolve over time, foster robust communities, and become lifestyle choices rather than one‑off experiences.
Zhu’s recent interview reveals that live‑service is only one facet of a broader, nuanced strategy. Over the past year, Tencent has reshaped its studio portfolio, allowing several UK‑based developers such as Splash Damage and Bulkhead to spin out as independent entities, echoing earlier separations of The Chinese Room and Secret Mode in 2025. When asked why, Zhu emphasized partnership fit: "If the collaboration doesn’t bring mutual value or align with our long‑term goals, it makes sense for the studio to thrive on its own." He acknowledged that not every acquisition integrates smoothly, citing market conditions and cultural differences as potential roadblocks. Beyond live‑service, Tencent places a strong emphasis on "evergreen" titles—games that retain relevance and generate steady engagement over many years.
This includes both single‑player experiences, which are especially prominent in the company’s mobile catalog, and multiplayer offerings that can be continually expanded. Zhu cited Call of Duty as an example of an evergreen IP that persists through successive iterations, underscoring that longevity can be achieved through iterative development rather than a single, monolithic release. Stability is a recurring theme in Zhu’s outlook.
He contrasted the volatility of premium‑title cycles—where studios may launch a hit and then face layoffs—with Tencent’s desire to provide a steadier employment landscape for its developers. To achieve this, the firm invests heavily in high‑quality talent and seeks synergistic relationships where both Tencent and the studio contribute unique strengths. Zhu oversees roughly twenty studios worldwide, ranging from European outfits like Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, and Stunlock Studios to North American and Oceania partners such as Digital Extremes and Grinding Gear Games.
The operational model focuses less on geographic expansion and more on ensuring each studio has the resources needed for successful launches. Tencent offers support in areas where it has proven expertise: regional publishing, technical infrastructure, testing, backend services, and data analytics.
A concrete illustration of this collaborative approach is the assistance provided to Funcom on the live‑service title Dune Awakening. Experts from Tencent’s Chinese and European teams worked side‑by‑side with Funcom developers, troubleshooting issues in real time and, when appropriate, transitioning those experts into permanent roles within the studio. Creative direction, however, generally remains the purview of the individual studios.
Tencent steps in primarily for cross‑studio challenges, such as optimizing Unreal Engine pipelines or navigating publishing logistics in regions like the Middle East, North Africa, and Southeast Asia. This balance allows studios to retain artistic autonomy while benefiting from Tencent’s global infrastructure. When discussing the relative size of projects Tencent backs, Zhu dispelled the myth that the conglomerate only pursues massive, multi‑hundred‑million‑dollar ventures.
While some executives, like Bulkhead’s CEO Joe Brammer, have suggested a £50 million floor, Zhu clarified that Tencent evaluates games of all scales based on the studio’s maturity, strategic fit, and potential for growth. He highlighted Larian Studios and FromSoftware—both minority‑stake partners—as examples of companies that have built lasting franchises through purposeful, incremental development rather than sheer budget.
Outsourcing and hybrid development models also feature prominently in Tencent’s playbook. The company experiments with small core teams complemented by external specialists, a strategy that proved effective for titles like Star Wars: Galactic Racer.
Zhu explained that determining the optimal staff mix depends on project complexity, the need for high‑precision talent, and geographic considerations such as time‑zone alignment and cost efficiency. For instance, Sumo Digital may support European studios due to proximity, whereas UK‑based operations might face higher overhead. The shifting landscape of global talent pools is another factor shaping Tencent’s decisions. As industry leader Amir Satvat noted at Gamescom Dev, development jobs are migrating from expensive hubs like California to more cost‑effective regions across Asia.
Zhu concurred, noting that while North America remains a hotbed of seasoned teams, the high cost of maintaining large in‑house support staff there makes remote or outsourced solutions more attractive. Tencent’s recent emphasis on Chinese studios’ rising prominence was evident at Gamescom’s Opening Night Live, which showcased a slew of polished titles from China. Zhu expressed optimism about this trend, attributing it to Chinese developers learning from high‑quality console and PC benchmarks set by games such as Black Myth: Wukong.
He observed that many Chinese teams, historically known for mobile and art‑outsourcing work, are now applying those lessons to create flagship experiences for broader platforms. A key enabler of this evolution is the adoption of AI tools. Zhu stressed that AI at Tencent is not intended to replace human creators but to augment their productivity. From concept art generation and rigging to motion‑matching, code review, and even automated project‑management bots in Slack, AI is being woven into multiple stages of the development pipeline.
He highlighted that Chinese developers, having grown up alongside these technologies, tend to embrace AI more readily than many Western studios, which often grapple with ethical, copyright, and community‑backlash concerns. Nevertheless, Zhu cautioned that the industry must still resolve legal ambiguities surrounding AI‑generated content. Tencent mitigates risk by restricting AI training data to its own proprietary libraries, ensuring that any output remains within the company’s intellectual property boundaries. Agreements with AI vendors further guarantee that data does not leak beyond internal environments, protecting both the company’s assets and its partners.
In summary, Tencent’s long‑term strategy is a multifaceted blend of live‑service ambition, evergreen IP cultivation, talent investment, and strategic use of AI. While the company has recently divested from certain studios like Bulkhead and Splash Damage, it continues to diversify its portfolio, exemplified by a minority investment in W4, the commercial partner behind the Godot engine. Zhu’s overarching goal remains consistent: keep players engaged, deliver enjoyable experiences, and ultimately translate that engagement into sustainable financial performance. As the gaming ecosystem continues to evolve, Tencent’s flexible, partnership‑centric approach positions it to adapt and thrive across both Western and Eastern markets.