Tencent’s strategic roadmap is anchored in three intertwined pillars: the pursuit of live‑service ecosystems, the integration of advanced AI tools, and the cultivation of evergreen intellectual property 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 for Tencent Games, the company’s nuanced approach to growth and sustainability was laid bare.
Zhu opened the discussion by acknowledging the industry’s mixed record with live‑service models. While some high‑profile attempts, such as Sony’s recent forays, have stumbled, other firms that have doubled down on traditional, single‑release cycles—Capcom being a prime example—have weathered market volatility with relative ease. Tencent, however, remains convinced that live services represent the "holy grail" of modern gaming. He pointed to the company’s own DNA: titanic successes like *Honor of Kings*, *League of Legends*, and *Valorant* all demonstrate how a game can evolve over years, continually adding content, fostering vibrant communities, and generating steady recurring revenue.
"It’s not just about a flash in the pan; it becomes a lifestyle for players," Zhu explained. Nevertheless, live service is only one thread in a broader tapestry. Over the past year, Tencent has reshaped its studio portfolio, allowing several UK‑based developers—including Splash Damage and Bulkhead—to spin out as independent entities. Zhu declined to detail the exact motivations, but emphasized a guiding principle: a partnership must be mutually beneficial.
If a studio’s vision does not align with Tencent’s long‑term objectives, or if a better opportunity exists outside the Tencent umbrella, the company will step back. "Sometimes the synergy isn’t there, or the strategic fit is off, and the studio is simply stronger on its own," he said.
Acquisitions, Zhu admitted, are not guaranteed home runs. Cultural mismatches, shifting market dynamics, and integration hurdles can turn even promising deals into learning experiences. Yet the overarching goal remains clear: to build sustainable, long‑lasting communities around both single‑player and multiplayer experiences.
Evergreen titles—whether a mobile puzzle game that retains millions of daily users or a flagship AAA franchise that releases iterative installments—are essential to this vision. Zhu cited *Call of Duty* as an example of an evergreen IP, noting that while each new release is a distinct product, the brand’s core identity persists and continues to draw players.
Stability, Zhu argued, is a competitive advantage. In the past, many premium developers have faced boom‑and‑bust cycles, hiring aggressively for a launch and then laying off staff when sales dip. Tencent seeks to avoid that volatility by providing a steady stream of resources and expertise, allowing studios to focus on long‑term growth rather than short‑term firefighting.
Talent acquisition and development form the second pillar of Tencent’s strategy. The company prioritises high‑quality creators whose skill sets complement its own capabilities. Zhu oversees a global network of roughly twenty studios, ranging from European powerhouses like Sumo Digital and Stunlock Studios to North American outfits such as Digital Extremes and New Zealand‑based Grinding Gear Games.
His role is less about dictating creative direction and more about ensuring each studio receives the operational support it needs—regional publishing know‑how, technical infrastructure, backend services, and data‑driven analysis. For instance, when Funcom’s *Dune Awakening* encountered technical challenges, experts from Tencent’s China and Europe teams embedded themselves alongside Funcom developers, troubleshooting in real time and, in some cases, transitioning into permanent staff members.
While Tencent can step in on technical or publishing matters, creative decisions largely stay with the individual studios. The company does, however, intervene when common obstacles arise—such as optimizing Unreal Engine pipelines or navigating the regulatory landscape of the MENA region. This collaborative model allows studios to retain artistic autonomy while benefitting from Tencent’s scale.
The conversation also touched on the size of projects Tencent is willing to back. A former Bulkhead CEO claimed the firm only considered games exceeding £50 million, but Zhu refuted that blanket rule. He stressed that Tencent evaluates opportunities across the spectrum, focusing on a studio’s stage of development and its ultimate aspirations.
Small‑scale titles do exist in the portfolio, and the company admires studios like Larian Studios and FromSoftware—both minority‑owned by Tencent—for their ability to produce purpose‑driven games that gradually expand their audiences without relying on blockbuster budgets. Outsourcing and hybrid development models are another area of focus. Tencent is experimenting with core internal teams supplemented by external specialists, a strategy that proved effective for titles like *Star Wars: Galactic Racer*. The balance between in‑house staff and outsourced talent hinges on factors such as geographic proximity, cost, and the need for highly specialized skill sets.
For example, Sumo Digital may support European studios due to time‑zone alignment, even though operating out of the UK carries higher overhead. Geopolitical shifts in the industry are also reshaping talent flows.
As Amir Satvat highlighted at Gamescom Dev, high‑cost regions like California are losing headcount to more affordable hubs in Asia. Zhu echoed this trend, noting that while North America remains a hotbed for seasoned, tightly knit development teams, the expense of maintaining large support crews there is increasingly untenable. Instead, Tencent leverages its global footprint to allocate resources where they deliver the greatest return on investment.
The rise of Chinese studios on the global stage was another highlight. Recent Gamescom showcases featured a slew of polished titles from Chinese developers, suggesting a possible power shift from West to East. Zhu expressed optimism, pointing to successes like *Black Myth: Wukong* that have raised the bar for console and PC quality. He observed that Chinese creators, traditionally strong in mobile, are now mastering high‑fidelity experiences, aided by improved tooling and a cultural embrace of artificial intelligence.
AI, according to Zhu, is not a threat but a catalyst for efficiency. He likens it to the early days of the internet—an inevitable wave that can amplify human capability when used responsibly.
Tencent encourages its partners to adopt AI for tasks ranging from concept art generation and rigging to code review and production management. AI‑driven bots, for instance, can populate Slack channels with reminders, freeing developers to focus on creative work. However, Zhu cautioned that content‑generation AI raises complex copyright questions.
Tencent mitigates risk by restricting training data to internally owned assets and securing agreements with tool providers to prevent external data leakage. In summary, Tencent’s long‑term plan is a balanced blend of live‑service ambition, AI‑enhanced productivity, and the nurturing of timeless IPs. By offering studios a stable, resource‑rich environment while respecting their creative independence, the company aims to keep players engaged for the long haul.
As Zhu succinctly put it, "Our ultimate metric is engagement—if players love the game and keep playing, that translates directly to the bottom line."