Tencent’s overarching plan for the future of gaming is built around three interlocking pillars: live‑service experiences, artificial‑intelligence‑enhanced development, and a portfolio of evergreen titles that can sustain long‑term player communities. In a recent, in‑depth conversation with Yong‑yi Zhu, Vice‑President and Head of Operations, Strategy and Compliance for Tencent Games, the company’s nuanced approach was laid out in detail, revealing how it balances ambition with pragmatism across its global studio network.
**Live‑service as a strategic anchor** Zhu opened the discussion by acknowledging the industry’s fascination with live‑service models, noting that they represent the "holy grail" for Tencent. The company’s DNA is already stamped with successful live‑service franchises such as *Honor of Kings*, *League of Legends* and *Valorant*. These games continuously evolve, creating stable revenue streams and fostering vibrant, self‑reinforcing communities.
"It’s not just about a burst of engagement; it becomes a lifestyle for players," Zhu explained. This philosophy drives Tencent’s investment in titles that can be updated, expanded, and re‑imagined over many years, rather than one‑off releases that quickly fade from the market.
However, the live‑service focus is not a blanket mandate for every studio. Zhu stressed that each partnership is evaluated on its own merits: does the collaboration add value for both parties, and does the game fit Tencent’s long‑term vision? When the answer is no, studios may be encouraged to spin out as independent entities. Recent examples include the UK‑based developers Splash Damage and Bulkhead, which have separated from Tencent after a period of joint work.
Zhu clarified that these moves stem from a lack of strategic alignment rather than any failure on the studios’ part, and that in many cases the studios are better positioned to thrive on their own. **Evergreen IP and sustainable communities** Beyond live‑service, Zhu highlighted the importance of evergreen intellectual property—games that retain relevance across multiple iterations and platforms. He cited *Call of Duty* as an exemplar of an evergreen franchise that, despite releasing a new version each year, remains a consistent revenue engine because the underlying brand stays strong. Tencent seeks to cultivate similar durability in its own portfolio, whether through single‑player experiences that resonate over time or multiplayer ecosystems that keep players returning month after month.
The company’s acquisition strategy reflects this mindset. Tencent now oversees roughly twenty studios worldwide, ranging from European developers such as Miniclip, Sumo Digital, Funcom, and Stunlock Studios to North‑American and Oceanic partners like Digital Extremes and Grinding Gear Games.
Rather than imposing a one‑size‑fits‑all development model, Tencent provides a flexible support framework that includes regional publishing expertise, technical assistance, backend infrastructure, and data‑driven analytics. Zhu described how experts from China and Europe might embed themselves within a studio—such as Funcom’s work on *Dune Awakening*—to troubleshoot specific challenges, and sometimes even transition to permanent roles if the collaboration proves fruitful. **AI as an enabling tool, not a replacement** When the conversation shifted to artificial intelligence, Zhu was unequivocal: AI should be viewed as a productivity enhancer rather than a threat to employment. He likened AI to the internet—an inevitable, transformative technology that can amplify human capabilities when used wisely.
Tencent encourages its developers to experiment with AI across the production pipeline, from concept art generation and rigging to motion‑matching, code review, and even project‑management bots that surface tasks in Slack channels. Chinese developers, according to Zhu, have embraced AI more readily, having grown up with tools that streamline creative workflows.
This cultural openness contrasts with a more cautious stance in the West, where concerns about ethics, copyright, and player backlash linger. Nonetheless, Zhu believes the industry will converge as the benefits of AI become undeniable.
He also emphasized that Tencent is careful to keep AI training data within its own ecosystem, signing agreements with tool providers to prevent external leakage of proprietary assets. This safeguards the company’s intellectual property while still allowing teams to leverage generative models built on internal libraries.
**Balancing scale and specialization** A recurring theme throughout the interview was the need to match the right level of support to each studio’s size and ambition. While some executives have suggested Tencent only pursues projects exceeding £50 million, Zhu disputed that notion. He explained that the firm evaluates opportunities across the spectrum, asking whether its expertise can help a smaller studio scale up or refine its craft. Examples of successful minority investments include Larian Studios and FromSoftware, both of which have produced purpose‑driven titles that gradually expanded their audiences without relying on blockbuster budgets.
Outsourcing also plays a strategic role. Tencent is experimenting with hybrid models where a core internal team is supplemented by external specialists—an approach that proved effective for *Star Wars: Galactic Racer* and is being considered for upcoming projects like *Expedition 33*.
Geographic considerations influence these decisions; for instance, Sumo Digital may support European studios due to time‑zone proximity, even though operating costs in the UK are relatively high. The company constantly weighs trade‑offs between cost, talent availability, and the need for close collaboration. **A shifting global landscape** Zhu observed a broader industry migration of talent and headcount from traditionally expensive hubs such as California to emerging regions across Asia and Eastern Europe.
This trend mirrors insights shared by industry leaders like Amir Satvat, who noted that development teams are increasingly distributed worldwide. Tencent’s own strategy reflects this reality: while it maintains strong development cores in places like Santa Monica—where Zhu spent a decade at Activision—it also leverages more cost‑effective locations for support functions, ensuring that the overall operation remains lean and adaptable. **Looking ahead** The conversation concluded with a forward‑looking perspective on the evolving balance between Chinese and Western game development.
Zhu expressed optimism that high‑quality Chinese titles showcased at events like Gamescom signal a genuine power shift, with studios now capable of delivering console‑grade experiences that rival long‑established Western franchises. He believes that as AI tools become more sophisticated and accessible, the gap will continue to narrow, fostering a more globally integrated gaming ecosystem.
In summary, Tencent’s long‑term strategy is not a single‑track pursuit of live‑service revenue. It is a multifaceted plan that nurtures evergreen IP, invests in top‑tier talent, embraces AI as a collaborative partner, and tailors support to the unique needs of each studio—whether large or small, Western or Eastern. By focusing on sustainable player engagement and continuous innovation, Tencent aims to create a stable, diversified portfolio that can weather market fluctuations and keep gamers invested for years to come.