Tencent’s strategic roadmap is built around three pillars: the pursuit of live‑service experiences, the integration of advanced AI tools, and the cultivation of evergreen intellectual property. While many industry observers have debated the merits of a live‑service‑first approach—citing Sony’s recent missteps and the mixed results of other companies that chased recurring revenue—Tencent remains convinced that this model can deliver lasting community engagement and financial stability. As Yong‑yi Zhu, Vice President and Head of Operations, Strategy and Compliance for Tencent Games, explains, the company’s DNA is rooted in titles such as Honor of Kings, League of Legends and Valorant, games that continuously evolve and deepen player connections, turning a simple pastime into a lifestyle.
Zhu acknowledges that live‑service is only one component of a broader, multifaceted strategy. Over the past year, Tencent has refined its portfolio, allowing several UK studios—including Splash Damage and Bulkhead—to spin out as independent entities. He notes that the decision to separate was driven by a lack of strategic fit: "If a partnership doesn’t amplify the game or align with our long‑term goals, it’s often better for the studio to stand on its own." This pragmatic stance extends to all acquisitions; cultural differences or market conditions can make integration difficult, and not every deal will become a slam‑ dunk. The company’s vision for evergreen titles encompasses both single‑player and multiplayer experiences, with a particular emphasis on mobile games that have proven to be durable revenue generators.
Zhu points to Call of Duty as an example of an evergreen IP that thrives through successive iterations, even though each new release is technically a separate product. The overarching aim is consistency: rather than experiencing the boom‑and‑bust cycles that have plagued many premium developers, Tencent seeks to provide stable employment and continuous content updates, thereby reducing layoffs and fostering long‑term loyalty among both creators and players. Talent acquisition is another cornerstone of the strategy. Zhu stresses that any collaboration must be synergistic, with Tencent offering resources such as regional publishing expertise, technical support, backend infrastructure, and data analytics.
His division oversees roughly twenty studios worldwide, including Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios, Digital Extremes, and Grinding Gear Games. The focus is less on geographic expansion and more on ensuring each studio has the tools it needs to launch and sustain successful titles. A concrete illustration of this support model is the partnership with Funcom on the live‑service title Dune Awakening. Experts from Tencent’s Chinese and European teams worked side‑by‑side with Funcom developers, troubleshooting engine‑related issues and, when appropriate, offering permanent positions to external specialists who proved valuable.
While creative direction remains firmly in the hands of the individual studios, Tencent steps in on cross‑cutting challenges—such as Unreal Engine optimisation or publishing logistics for regions like MENA and Southeast Asia. When asked whether Tencent is shifting its focus toward larger live‑service projects at the expense of smaller, premium games, Zhu clarifies that the answer depends on each studio’s DNA. Funcom, for example, had already been operating Conan Exiles as a live‑service before Tencent’s investment, so the partnership naturally reinforced that direction.
Conversely, other studios that experimented with live‑service but found it unsustainable have reverted to their core competency of premium, single‑player experiences. Zhu rejects the notion that Tencent only backs games with massive budgets; he emphasizes that the company evaluates projects of all scales based on the studio’s development stage and potential for growth. Tencent’s investment philosophy is illustrated by its minority stakes in Larian Studios and FromSoftware, which Zhu describes as “north stars.” These studios have built their reputations over time, releasing titles that may not always be blockbuster hits but consistently expand their audiences and refine their craft.
This approach demonstrates that Tencent values purposeful, incremental growth as much as headline‑grabbing launches. On the operational side, Zhu admits that the goal of tighter integration between Tencent’s Western and Chinese divisions has proved more challenging than anticipated, largely due to time‑zone differences. Instead, the company is concentrating on cross‑studio knowledge transfer, allowing best practices to flow organically throughout the network. He also highlights a hybrid development model that blends small, core internal teams with external vendors—a method that proved effective for projects like Star Wars: Galactic Racer and is being explored for upcoming titles such as Expedition 33.
Geography continues to influence outsourcing decisions. While the UK offers proximity for European studios, higher costs make it less attractive for certain support functions. Tencent therefore evaluates each studio’s needs, balancing the benefits of same‑time‑zone collaboration against budgetary constraints. This mirrors broader industry trends noted by Amir Satvat at Gamescom Dev, where development talent is migrating from expensive hubs like California to more cost‑effective regions across Asia.
Zhu also reflects on the shifting power dynamics in the global games market. The prominence of Chinese studios at Gamescom’s Opening Night Live suggests a rising influence of Eastern developers, many of whom are transitioning from mobile‑first expertise to high‑quality console and PC productions. He attributes part of this evolution to improved tooling, especially AI‑driven solutions that accelerate iteration and raise the visual fidelity of smaller teams.
AI, according to Zhu, is not a replacement for human creativity but a catalyst for efficiency. Tencent encourages developers to leverage AI for tasks ranging from concept art generation and rigging to code review and production management. He acknowledges ongoing concerns about copyright and data ownership, emphasizing that Tencent restricts AI training data to internally owned assets and negotiates strict agreements with tool providers to prevent leakage of proprietary content. In summary, Tencent’s long‑term strategy is a balanced blend of live‑service ambition, AI‑enhanced development pipelines, and the nurturing of timeless IPs.
By providing studios with tailored support, fostering talent, and embracing cutting‑edge tools while respecting creative autonomy, Tencent aims to keep players engaged for the long haul. As Zhu succinctly puts it, the ultimate metric is simple: the more people love and repeatedly play a game, the stronger the bottom line becomes.