Tencent’s overarching vision for its gaming empire is built around three interconnected pillars: the pursuit of live‑service experiences, the integration of advanced AI tools, and the cultivation of evergreen intellectual properties that can sustain long‑term player engagement. This strategy, explained by Yong‑yi Zhu, Vice‑President and Head of Operations, Strategy and Compliance for Tencent Games, reflects both the company’s historical DNA and its evolving ambitions in a rapidly shifting industry. ### Live Service as a Core Objective Zhu repeatedly emphasizes that live service is the "holy grail" for Tencent.
The company’s flagship titles—Honor of Kings, League of Legends, and Valorant—exemplify games that continuously evolve, fostering stable communities and turning short‑term play into an ongoing lifestyle. By designing products that can be updated, expanded, and monetized over years, Tencent aims to create a reliable revenue stream that cushions studios against the boom‑and‑bust cycles that have plagued rivals.
While other publishers such as Sony have suffered setbacks when chasing recurring‑revenue models, Tencent remains confident that its deep‑rooted expertise in live‑service ecosystems will keep it ahead. However, live service is not the sole focus. Zhu explains that the strategy is nuanced: it must align with each studio’s DNA and the broader goals of the Tencent portfolio. Recent separations of UK studios Splash Damage and Bulkhead, as well as earlier spin‑outs like The Chinese Room and Secret Mode, illustrate a willingness to let studios thrive independently when synergy is lacking.
"If the partnership doesn’t amplify the game or fit our long‑term plan, we step back," Zhu says, underscoring a pragmatic approach to acquisitions. ### Evergreen IPs and Sustainable Communities Beyond the live‑service model, Tencent places great value on evergreen titles—games that retain relevance across multiple iterations and platforms.
Zhu cites Call of Duty as an example of an evergreen franchise that, despite being released as successive versions, maintains a consistent player base and brand identity. Tencent’s own portfolio includes a mix of single‑player and multiplayer experiences, many of which are anchored in the mobile space where the company has historically excelled.
The goal is stability: rather than hiring and laying off staff in response to a single hit, Tencent seeks to build studios that can deliver a steady stream of content. This approach reduces volatility and promotes long‑term employment, a stark contrast to the “ups and downs” observed at other premium game developers. ### Talent, Synergy, and Global Support Investing in high‑quality talent remains a cornerstone of the strategy.
Zhu stresses that successful collaborations require mutual value—Tencent must bring something to the table, and developers must contribute equally. The company’s global network, which includes Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios, Digital Extremes, and Grinding Gear Games, serves as a resource hub.
Studios receive assistance with regional publishing, technical infrastructure, testing, backend services, and data analysis, leveraging Tencent’s domestic expertise to accelerate global launches. A concrete illustration of this support is the assistance provided to Funcom on the live‑service title Dune Awakening.
Experts from China and Europe worked side‑by‑side with Funcom developers, addressing engine challenges and, in some cases, transitioning into permanent staff members. While creative direction largely stays with the individual studio, Tencent steps in on cross‑studio technical issues—such as Unreal Engine optimization—or regional publishing hurdles in markets like the Middle East, North Africa, and Southeast Asia.
### Balancing Scale: From AAA to Indie When asked about the size of projects Tencent is willing to back, Zhu rejects the notion that the company only pursues multi‑hundred‑million‑dollar games. He points to a diverse portfolio that includes smaller titles, noting that the decision hinges on a studio’s stage of development and its potential trajectory.
Larian Studios and FromSoftware, in which Tencent holds minority stakes, serve as “north stars” because they have consistently delivered purposeful games that grow their audiences over time, regardless of budget. Even studios that previously attempted live‑service models but found them unsuitable have been encouraged to refocus on premium experiences that align with their core strengths.
This flexibility demonstrates Tencent’s willingness to adapt its investment thesis to the unique capabilities of each partner. ### The Role of AI as an Enabler AI tools occupy a prominent place in Tencent’s future roadmap, but Zhu is careful to frame them as augmentative rather than substitutive.
He likens AI to the internet—a transformative utility that, when harnessed correctly, boosts efficiency across coding, art creation, rigging, motion matching, and even project management. Smaller development teams, often comprising 30‑40 members, can now produce higher‑quality content at a faster pace thanks to AI‑driven iteration. Zhu acknowledges cultural differences in AI adoption: Chinese developers tend to embrace these tools eagerly, while Western studios may be more cautious due to ethical, copyright, and community concerns.
Nonetheless, he urges a broader acceptance, stating, "People should just not be afraid of AI; it’s a tool that can make us more effective." To mitigate legal risks, Tencent ensures that AI systems are trained exclusively on proprietary assets, keeping data within the company’s secure environment. Agreements with tool providers prevent external leakage of Tencent‑generated content, safeguarding intellectual property and avoiding inadvertent cross‑pollination of assets. ### Geographic Considerations and Outsourcing Location continues to influence outsourcing decisions. While some studios benefit from distant partners that provide cost advantages, others prefer collaborators in similar time zones for real‑time communication.
Tencent’s UK‑based Sumo Digital, for example, may support European studios despite the higher cost of operating in the UK. This trade‑off reflects a broader industry trend highlighted by Amir Satvat’s Gamescom keynote: development talent is migrating from expensive hubs like California to more cost‑effective regions across Asia and Eastern Europe.
Zhu concurs, noting that maintaining a lean core team complemented by specialized external vendors allows studios to scale efficiently. The model proved successful for projects like Star Wars: Galactic Racer and is being examined for upcoming titles such as Expedition 33. ### Looking Ahead Tencent’s recent minority investment in W4, the commercial partner behind the open‑source Godot engine, signals a continued interest in diversifying its technological base.
While the company has stepped back from certain acquisitions, its overarching mission remains clear: keep players engaged, foster vibrant communities, and translate that engagement into sustainable financial performance. In Zhu’s 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 we keep people engaged, make sure they’re having fun.
Because, to put it bluntly, the more people love your game, the more they’ll play it, and that drives the bottom line."