Tencent’s strategic roadmap is built around three pillars: the expansion of live‑service ecosystems, the integration of advanced AI tools, and the cultivation of evergreen intellectual property. In a recent interview, Yong‑yi Zhu, Vice‑President and head of Operations, Strategy and Compliance for Tencent Games, painted a picture of a company that sees live services not merely as a revenue model but as a cultural lifestyle that binds players to a game for years. He pointed to the firm’s own DNA—titles such as Honor of Kings, League of Legends, and Valorant—as proof that games that evolve over time create stable, vibrant communities and generate recurring income streams.
While live services remain a cornerstone, Zhu emphasized that they are only one facet of a broader, more nuanced approach. Since the last conversation with GamesIndustry.biz, Tencent has undergone several portfolio adjustments.
Notably, UK studios Splash Damage and Bulkhead have spun out as independent entities, echoing earlier separations of The Chinese Room and Secret Mode in 2025. Zhu declined to detail the reasoning but suggested that the company evaluates each partnership on a case‑by‑case basis, asking whether the collaboration adds value for both sides. When synergy is lacking or when a studio appears better positioned to thrive on its own, Tencent will step back, allowing the studio to pursue a standalone future.
The executive acknowledged that not every acquisition hits the mark. Cultural differences, market volatility, and integration challenges can impede success, and he admitted that some deals simply do not become "slam‑dunks." Nonetheless, the overarching goal is to build sustainable, long‑term communities around games—whether they are single‑player experiences, multiplayer battles, or hybrid models.
Evergreen titles, especially those that can be expanded with new content over time, are central to this vision. Zhu cited Call of Duty as an example of an evergreen IP that persists through successive iterations, reinforcing the idea that a franchise can evolve while retaining its core identity. Stability is another recurring theme.
In the past, many premium developers have experienced boom‑and‑bust cycles, launching a hit and then cutting staff when the next project stalls. Tencent aims to avoid that volatility by providing consistent support and resources, thereby fostering a more reliable development environment. This stability extends to talent acquisition as well; the company seeks high‑quality developers whose goals align with Tencent’s strategic objectives. The synergy between the parent company and its studios is essential for mutual growth.
Zhu oversees roughly twenty studios across the globe, including Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios in Europe, Digital Extremes in North America, and Grinding Gear Games in New Zealand. His focus is less on geographic expansion and more on ensuring each studio has the tools it needs to succeed at launch and beyond. This includes access to Tencent’s extensive publishing network, technical assistance, testing facilities, backend infrastructure, and data analytics. For instance, when Funcom worked on Dune Awakening, experts from both China and Europe were dispatched to collaborate directly with the development team, offering hands‑on problem solving and, in some cases, transitioning to permanent roles within the studio.
Creative direction largely remains the domain of individual studios, but Tencent steps in when common technical hurdles arise—such as optimizing Unreal Engine performance—or when navigating regional publishing challenges in markets like the Middle East, North Africa, or Southeast Asia. The company’s flexible support model allows it to adapt to the unique needs of each partner while maintaining a consistent standard of quality.
The conversation also touched on the size of projects Tencent is willing to back. While some industry observers claim the firm only pursues games with budgets exceeding £50 million, Zhu refuted that notion. He explained that Tencent evaluates opportunities across the entire spectrum, from indie‑scale titles to AAA blockbusters, based on the studio’s stage of development and its long‑term aspirations. Smaller games do exist within Tencent’s portfolio, and the company is open to nurturing them if the fit is right.
Larian Studios and FromSoftware serve as "north stars" for Tencent’s investment philosophy. Although Tencent holds only minority stakes, both studios demonstrate how a series of purpose‑driven releases can gradually expand an audience and refine a developer’s craft. Their success stories illustrate that a focus on quality and consistent audience building can be just as valuable as chasing massive budgets. On the operational front, Zhu noted that the plan to more tightly integrate Tencent’s Western and Chinese divisions has progressed slower than hoped, largely due to time‑zone and cultural challenges.
Instead, the emphasis has shifted toward cross‑studio knowledge sharing, allowing best practices to flow throughout the network. One promising model involves small core teams augmented by external specialists—a structure that proved effective for titles like Star Wars: Galactic Racer and is being considered for upcoming projects such as Expedition 33.
Outsourcing decisions are heavily influenced by location and cost considerations. While some studios benefit from distant partners, others prefer collaborators within the same time zone to streamline communication. For example, Sumo Digital may support European studios because of geographic proximity, even though the UK is not the cheapest locale.
These trade‑offs highlight the importance of strategic planning in resource allocation. The broader industry landscape is also shifting. As Amir Satvat highlighted at Gamescom Dev, development talent is migrating from high‑cost regions like California to more affordable hubs across Asia. Zhu concurred, noting that North America has become increasingly challenging for studios without an entrenched, long‑standing team.
He argued that while a lean, highly skilled team can sustain ongoing content delivery, support functions—especially those that are not core creative work—are better situated in lower‑cost regions. The rise of Chinese studios on the global stage was evident at Gamescom’s Opening Night Live, where many polished titles showcased the technical prowess of Chinese developers. Zhu expressed optimism about this trend, citing games such as Black Myth: Wukong as proof that Chinese teams now understand the standards required for high‑quality console and PC experiences.
He explained that the evolution from mobile‑first production to console‑level craftsmanship has been accelerated by better tooling, particularly AI‑driven solutions. AI, in Zhu’s view, is a catalyst rather than a replacement for human talent.
He described how AI tools enable smaller development teams—often 30‑40 people—to produce content at a scale previously reserved for much larger studios. AI assists with concept art, rigging, motion matching, code review, and even project management tasks like automated Slack reminders.
While Western developers sometimes hesitate to adopt AI due to ethical, copyright, and public‑perception concerns, Zhu urged a more open mindset, comparing AI adoption to the early days of the internet: a transformative technology that can boost efficiency when used responsibly. Tencent is proactive about the legal complexities surrounding generative AI.
The company ensures that any AI models it employs are trained on proprietary assets, thereby avoiding potential infringement on external creators’ works. Agreements with AI vendors explicitly restrict data usage to internal projects, preventing accidental leakage of Tencent‑owned IP into other games. This cautious approach safeguards both the company’s intellectual property and the broader ecosystem. In summary, Tencent’s long‑term strategy weaves together live‑service ambition, AI‑enhanced development, and the nurturing of evergreen franchises.
By providing robust support to a diverse array of studios—whether they are expanding a massive multiplayer universe or polishing a niche indie experience—the firm aims to keep players engaged for the long haul. As Zhu succinctly put it, the ultimate metric is enjoyment: the more players love a game, the more they will play it, and the stronger the bottom line becomes.