Tencent’s strategic roadmap is built around three interlocking pillars: live‑service ecosystems, advanced AI tooling, and the cultivation of evergreen intellectual property. While the industry has seen mixed results from a pure live‑service focus—Sony’s gamble faltered and many developers chasing recurring revenue streams have stumbled—Tencent remains convinced that the model, when paired with strong community foundations, offers a sustainable path forward. Yong‑yi Zhu, Vice‑President and head of operations, strategy and compliance for Tencent Games, summed up the company’s philosophy: “Our holy grail is live service.
Look at our DNA—Honor of Kings, League of Legends, Valorant. Those games evolve over time, create stable revenue, and foster lasting player communities.
The goal is to turn a game into a lifestyle, not just a fleeting experience.” Zhu’s recent interview reveals that live service is only one facet of a broader, more nuanced strategy. Since the last conversation a year ago, Tencent has let go of several UK studios—including Splash Damage and Bulkhead—following earlier separations of The Chinese Room and Secret Mode. When asked about these exits, Zhu explained that the company evaluates each partnership on synergy and strategic fit: if a studio’s direction does not align with Tencent’s long‑term objectives, it may be better off operating independently.
"Integration can be tricky," Zhu admitted. "Market conditions, cultural differences, and mismatched visions sometimes make an acquisition less than a slam dunk. We accept that not every deal will be a home run." The emphasis, therefore, is on building “evergreen” titles—games that can sustain engagement over years, whether they are single‑player experiences or multiplayer services. Zhu cited Call of Duty as an example of an evergreen IP that continually refreshes itself through new installments while maintaining a loyal fan base.
Stability is another recurring theme. Zhu warned that many premium developers have suffered boom‑and‑bust cycles, hiring aggressively for a single launch and then laying off staff when sales dip. Tencent aims to avoid that volatility by supporting studios with consistent resources and expertise, helping them deliver regular content updates without the need for massive workforce swings.
Talent acquisition and retention also sit at the heart of the plan. Tencent seeks high‑quality developers whose strengths complement the company’s own capabilities.
The firm now 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 dictating creative direction, Tencent provides a suite of services—regional publishing, technical support, testing, backend infrastructure, and data analytics—leveraging its domestic market experience to accelerate global launches. A concrete illustration of this support model is the collaboration on *Dune Awakening*. Experts from Tencent’s Chinese and European teams embedded themselves alongside Funcom’s developers, troubleshooting engine issues, refining gameplay, and even offering permanent positions to standout contributors.
While artistic and narrative decisions remain the studio’s domain, Tencent steps in on cross‑studio challenges such as Unreal Engine optimization or navigating publishing hurdles in regions like the Middle East, North Africa, and Southeast Asia. The conversation also touched on the balance between large live‑service projects and smaller, premium titles. Funcom’s experience exemplifies this duality: after acquiring the studio, Tencent continued to back its long‑running live‑service, *Conan Exiles*, while also supporting the development of *Dune Awakening*, a more narrative‑driven experience. Zhu stressed that the decision depends on each studio’s DNA and market positioning.
Some studios that attempted live service found it unsustainable and pivoted back to their core competency of premium games, which remain their primary revenue source. Contrary to rumors that Tencent only backs games exceeding £50 million, Zhu clarified that the company evaluates projects of all scales. “It’s less about budget size and more about where the studio is on its journey and what its ultimate destination looks like,” he said.
Tencent already holds minority stakes in studios like Larian and FromSoftware, which have built their reputations through purposeful, iterative releases rather than blockbuster budgets. Outsourcing and hybrid development models are also evolving.
Tencent sees value in small, core teams augmented by external specialists—a strategy that proved effective for *Star Wars: Galactic Racer* and is being considered for upcoming titles like *Expedition 33*. The choice of outsourcing partners often hinges on geography: European studios may collaborate with nearby vendors for tighter time‑zone alignment, while UK‑based teams weigh cost against proximity. Zhu noted broader industry shifts, citing Amir Satvat’s Gamescom keynote about talent migration from high‑cost regions such as California to more affordable hubs across Asia.
“North America is becoming increasingly challenging unless you have a tightly knit, veteran team,” Zhu observed, drawing on his own background at Activision’s Santa Monica hub. For support functions, locating teams in less expensive locales makes financial sense.
The rise of Chinese studios on the global stage was another focal point. Zhu expressed optimism that games like *Black Myth: Wukong* have set new quality benchmarks for console and PC development, inspiring Chinese developers to elevate their standards beyond mobile‑centric design. This cultural shift is reinforced by improved tooling, especially AI‑driven solutions.
AI, in Zhu’s view, is a productivity enhancer rather than a replacement for human creativity. “Think of AI as the internet—an indispensable utility,” he said. Tencent encourages developers to experiment with AI for concept art, rigging, motion matching, code review, and even project‑management bots in communication platforms. While the West remains cautious due to ethical, copyright, and player‑backlash concerns, Chinese studios appear more eager to adopt these tools, seeing them as a natural evolution of their workflow.
Nonetheless, Zhu acknowledged unresolved legal questions surrounding generative AI content. Tencent mitigates risk by restricting AI models to internal asset libraries, ensuring that any AI‑generated material originates from the company’s own IP.
Agreements with tool providers further safeguard against inadvertent data leakage that could lead to unauthorized reuse of Tencent’s assets. In summary, Tencent’s long‑term plan blends live‑service ambition with a commitment to evergreen IP, strategic talent acquisition, and AI‑enhanced development pipelines.
By offering studios robust backend support, flexible outsourcing options, and a clear focus on sustained player engagement, the company aims to create a stable, profitable ecosystem that can adapt to shifting market dynamics while keeping the player experience at the forefront.