Tencent’s strategic outlook is built around three pillars: live‑service games, advanced AI tools, and evergreen intellectual property that can sustain long‑term player communities. While many analysts have warned that an over‑reliance on live‑service models can be risky—citing Sony’s recent missteps and other studios that have chased recurring‑revenue promises only to stumble—Tencent remains convinced that the live‑service approach is a core component of its future. The company’s flagship titles such as Honor of Kings, League of Legends and Valorant illustrate how a game can evolve over years, continuously adding content, fostering social bonds, and turning a simple pastime into a lifestyle. Yong‑yi Zhu, Vice‑President and head of operations, strategy and compliance for Tencent Games, summed up the philosophy succinctly: "Our holy grail is live service.
It gives stability to studios, builds communities, and turns short‑term engagement into a lasting habit." Yet Zhu was quick to stress that live‑service is only one thread in a broader tapestry. In the year since GamesIndustry.biz last interviewed him, Tencent has reshaped its portfolio, allowing studios such as Splash Damage and Bulkhead to spin out as independent entities. Zhu explained that when a partnership does not generate mutual value—whether because of cultural mismatches, market conditions, or a lack of strategic alignment—the company prefers the studio to thrive on its own rather than remain under the Tencent umbrella.
The reality, Zhu admits, is that not every acquisition works out perfectly. Integrating new studios can be hampered by differing corporate cultures or shifting market dynamics, and some deals simply do not become "slam‑dunks." Nevertheless, the overarching goal remains clear: develop evergreen titles—both single‑player experiences and multiplayer services—that nurture sustainable communities over many years. Live‑service games are a means to that end, not the sole destination. As Zhu pointed out, even a franchise like Call of Duty can be considered evergreen because it continually refreshes its core IP with new installments.
Stability is another recurring theme. In contrast to companies that experience boom‑and‑bust cycles—launching a hit, then laying off staff when the next title stalls—Tencent aims to smooth out those peaks and valleys.
By investing in high‑quality talent and ensuring that each studio receives the right mix of support—regional publishing expertise, technical assistance, testing, backend infrastructure, and data analytics—Tencent hopes to create a more predictable, long‑lasting revenue stream. Zhu oversees roughly twenty studios worldwide, ranging from European developers like Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers and Stunlock Studios, to North American and Oceania partners such as Digital Extremes and Grinding Gear Games. His focus is less about where the studios will go next and more about guaranteeing that each launch succeeds. To that end, Tencent provides shared services that have proven effective in China and adapts them for global markets.
For example, when Funcom worked on Dune Awakening, experts from both China and Europe collaborated on‑site, troubleshooting engine issues and even offering permanent positions to those who proved valuable. Creative direction typically stays with the individual studio, but Tencent steps in when common technical challenges arise—such as optimizing Unreal Engine pipelines—or when a game needs regional publishing support in markets like the Middle East, North Africa, or Southeast Asia. This flexible, case‑by‑case assistance allows studios to retain artistic autonomy while benefiting from Tencent’s massive operational muscle. The conversation about studio size also surfaced.
Some observers claim Tencent only backs projects exceeding £50 million, yet Zhu refuted that notion. He said Tencent evaluates games of all scales, looking at where a studio sits on its development journey and whether Tencent’s expertise can help it grow. The portfolio already includes smaller titles, and the company cites Larian Studios and FromSoftware—both minority‑stake partners—as examples of studios that have built a series of purposeful, audience‑building games without necessarily delivering blockbuster sales figures.
Outsourcing and hybrid development models are another strategic lever. Tencent sees value in core internal teams complemented by external vendors for specialized tasks, a model that proved successful for titles like Star Wars: Galactic Racer and is being explored for upcoming projects such as Expedition 33. Geographic considerations play a role, too: while the UK offers proximity for European studios, cost‑effectiveness may favor partners in other regions, prompting Tencent to weigh time‑zone alignment against budget constraints. A broader industry shift is evident as talent migrates from high‑cost hubs like California to more affordable regions across Asia.
Zhu noted that maintaining a large, permanent staff in expensive locales is increasingly untenable, especially for support functions. Instead, the company embraces a leaner internal core while leveraging global talent pools to scale production as needed. Chinese developers, historically known for mobile expertise, are now producing high‑quality console and PC experiences.
Zhu highlighted titles such as Black Myth: Wukong as proof that Chinese studios have internalized the standards of premium Western games. This evolution is accelerated by better tooling, particularly AI‑driven solutions. According to Zhu, AI at Tencent is not about replacing humans but about augmenting them—speeding up concept art, rigging, motion matching, code reviews, and even project‑management tasks via AI bots in communication platforms. While Western developers often approach AI cautiously due to ethical, copyright, and community concerns, Zhu encourages a more open mindset.
He likens AI adoption to the early days of the internet: an inevitable, transformative force that can boost personal efficiency when used wisely. Tencent promotes AI as a "genuine tool" for developers, emphasizing that the company prefers AI that works with internally owned data to avoid intellectual‑property complications.
Agreements with tool providers ensure that generated content remains confined to Tencent’s ecosystem and does not leak into external projects. In summary, Tencent’s long‑term game‑development strategy blends live‑service ambition with a commitment to evergreen IP, a focus on high‑quality talent, and a pragmatic embrace of AI and outsourcing. By providing studios with tailored support, encouraging cross‑regional collaboration, and remaining flexible about project scale, Tencent aims to keep players engaged for the long haul—because, as Zhu puts it, sustained player enjoyment ultimately translates into a healthier bottom line.