Tencent’s overarching plan for the future of gaming revolves around three pillars: live‑service experiences, cutting‑edge AI tools, and the cultivation of evergreen franchises that can thrive across platforms and generations. In a recent, in‑depth conversation with Yong‑yi Zhu, Vice President and head of operations, strategy and compliance at Tencent Games, the company’s nuanced approach was laid out in detail, revealing both the ambition and the pragmatic adjustments the conglomerate has made over the past year. The live‑service model remains the centerpiece of Tencent’s strategy, but the firm is careful to frame it as a means rather than an end.
Zhu explained that the DNA of Tencent is evident in titles such as *Honor of Kings*, *League of Legends* and *Valorant*—games that evolve over time, deepen player communities, and generate recurring revenue streams. "Our holy grail is live service," he said, emphasizing that successful live‑service games become part of a player’s daily routine, effectively turning a pastime into a lifestyle.
However, Zhu was quick to note that live service is only one facet of a broader vision that also includes single‑player experiences, especially within the mobile sector, and a focus on building sustainable, long‑term communities. Recent portfolio changes illustrate how Tencent balances ambition with realism. The UK studios Splash Damage and Bulkhead have spun out as independent entities, following earlier separations of The Chinese Room and Secret Mode in 2025. Zhu declined to discuss the specifics but highlighted a core principle: a partnership must bring mutual value.
When the strategic fit is lacking—whether due to misaligned goals, cultural differences, or market conditions—Tencent prefers to let studios thrive on their own. "Sometimes a studio is better standalone than under the Tencent umbrella," he remarked.
Acquisitions, while a key growth engine, are not guaranteed successes. Zhu admitted that integrating new studios can be challenging, especially when market dynamics shift or cultural gaps emerge.
Nevertheless, the company’s long‑term blueprint hinges on cultivating evergreen titles—both multiplayer and single‑player—that can maintain relevance and revenue over many years. He cited *Call of Duty* as an example of an evergreen IP that persists through iterative releases, reinforcing the idea that a strong franchise can sustain a steady flow of content without constant reinvention.
Stability and consistency are recurring themes in Zhu’s narrative. He contrasted the volatility of premium releases—where a single hit can trigger layoffs when it underperforms—with Tencent’s aim to provide a steadier employment landscape for its developers. By leveraging its extensive ecosystem, Tencent offers studios support in regional publishing, technical infrastructure, testing, backend services, and data analytics.
This collaborative model is exemplified by the assistance provided to Funcom on *Dune Awakening*, where experts from China and Europe worked side‑by‑side with the development team, sometimes transitioning into permanent roles if the partnership proved fruitful. Creative direction, however, largely remains the domain of the individual studios. Tencent steps in mainly for cross‑studio technical challenges—such as optimizing Unreal Engine pipelines—or for navigating publishing complexities in regions like the Middle East, North Africa, and Southeast Asia. This selective involvement allows studios to retain artistic autonomy while benefiting from Tencent’s global reach and technical expertise.
The conversation also touched on the scale of projects Tencent is willing to back. While some observers claim the company only pursues games with budgets exceeding £50 million, Zhu refuted that notion. He emphasized that Tencent evaluates opportunities based on the studio’s stage, potential for growth, and cultural compatibility rather than a strict financial threshold.
Smaller titles are indeed part of the portfolio, and the firm looks to help them scale when appropriate. Zhu highlighted two “north star” investments—Larian Studios and FromSoftware—where Tencent holds minority stakes. Both companies have built their reputations through purpose‑driven, gradually expanding franchises, demonstrating that size does not dictate impact. Their success stories reinforce Tencent’s belief that nurturing craftsmanship and audience loyalty can be more valuable than chasing blockbuster budgets.
On the operational side, Tencent has experimented with hybrid development models that combine core internal teams with external partners. This approach proved effective for projects like *Star Wars: Galactic Racer* and is being considered for upcoming titles such as *Expedition 33*. The decision on how many staff to retain in‑house versus outsource depends on the need for specialized skills, geographic considerations, and cost efficiency.
For instance, Sumo Digital may support European studios due to proximity, even though the UK’s higher labor costs present a trade‑off. Geographic shifts in talent pools were also discussed. Zhu noted that high‑cost locations like California are becoming less attractive for support functions, while regions across Asia are gaining prominence.
This mirrors industry observations, such as Amir Satvat’s keynote at Gamescom Dev, which highlighted the migration of headcount from North America to more cost‑effective locales. The rise of Chinese studios on the global stage was another focal point. Zhu expressed optimism about the growing influence of Chinese developers, citing titles like *Black Myth: Wukong* that have set new standards for console and PC quality. He argued that Chinese teams, traditionally strong in mobile, are now mastering high‑end production values, aided by improved tooling and a willingness to adopt best‑in‑class practices.
Artificial intelligence emerged as a pivotal enabler in this evolution. Zhu described AI not as a replacement for human creators but as a productivity booster that can accelerate iteration across art, animation, code review, and even project management.
Tencent encourages its studios to experiment with AI tools—such as generative art for concept work, rigging assistants, and motion‑matching algorithms—while remaining vigilant about copyright and data ownership. The company enforces strict agreements with AI vendors to ensure that generated content remains within the confines of its own IP libraries, thereby mitigating legal risks. In summary, Tencent’s long‑term strategy is a balanced blend of live‑service ambition, investment in high‑quality talent, support for evergreen franchises, and strategic use of AI. By providing studios with technical, publishing, and analytical resources while respecting creative independence, Tencent aims to create a resilient ecosystem where games can evolve, communities can flourish, and revenue streams remain stable.
As Zhu concluded, the ultimate metric is player engagement: the more people enjoy and return to a game, the stronger the bottom line for both the developer and Tencent’s broader portfolio.