Tencent Games continues to shape its future around three core pillars: live‑service experiences, artificial‑intelligence‑enhanced development, and evergreen intellectual property. While many industry observers have questioned the wisdom of chasing recurring‑revenue models, the Chinese conglomerate remains convinced that live services are the "holy grail" of modern gaming. Yong‑yi Zhu, Vice President and head of operations, strategy and compliance for Tencent Games, explains that the company’s DNA is built on titles such as Honor of Kings, League of Legends and Valorant—games that evolve over time, foster lasting communities, and become part of players' daily routines. Zhu stresses that live service is only one component of a broader strategy.
Since the last interview with GamesIndustry.biz, Tencent has re‑evaluated several studio partnerships. The UK developers Splash Damage and Bulkhead have become independent, following earlier spin‑offs of The Chinese Room and Secret Mode in 2025.
Zhu notes that the decision to let studios go was driven by a lack of strategic alignment and the belief that those studios could thrive better on their own. He acknowledges that not every acquisition integrates smoothly; market conditions and cultural differences can create friction, and not every deal will be a "slam dunk." The company’s long‑term plan hinges on cultivating "evergreen" titles—games that retain relevance and generate revenue long after launch.
This includes both single‑player experiences, which dominate Tencent’s mobile portfolio, and multiplayer live‑service games that nurture persistent communities. Zhu points to franchises like Call of Duty as examples of evergreen IPs that evolve through successive releases while maintaining a loyal fan base.
Stability is a recurring theme. Zhu observes that many premium developers have experienced boom‑and‑bust cycles, hiring for a single launch and then laying off staff when revenue tapers. Tencent aims to provide a steadier environment, leveraging its massive ecosystem to support studios throughout a game's lifespan rather than just at launch.
This support covers regional publishing, technical assistance, testing, backend infrastructure, and data analysis—services the company has refined in its domestic market and now adapts for global partners. A concrete illustration of this collaborative model is the work on Dune Awakening. Experts from Tencent’s Chinese and European teams embedded themselves alongside Funcom developers, troubleshooting engine issues, optimizing performance, and, when appropriate, offering permanent positions to outstanding contributors.
While creative direction remains the studio's domain, Tencent steps in on cross‑studio challenges such as Unreal Engine optimization or navigating publishing hurdles in regions like the Middle East, North Africa, and Southeast Asia. The conversation also touches on the balance between large live‑service projects and smaller, premium titles.
Zhu explains that the decision is studio‑specific. For instance, Funcom had been running the live‑service game Conan Exiles before Tencent’s investment, so the partnership naturally supports that model.
Other studios that experimented with live service and found it unsuitable have pivoted back to premium experiences, which remain their core competency. Contrary to rumors that Tencent only backs games exceeding £50 million, Zhu clarifies that the firm evaluates projects of all scales based on the studio’s developmental stage and long‑term potential. Smaller titles already exist within Tencent’s portfolio, and the company is open to nurturing them.
Tencent’s investment philosophy also highlights “north‑star” partners such as Larian Studios and FromSoftware, where minority stakes have helped these developers grow their craft over time. These collaborations demonstrate that success does not always require blockbuster budgets; purposeful, audience‑building games can thrive under Tencent’s guidance. On the operational side, Zhu admits that efforts to integrate Chinese and Western support teams have progressed slower than hoped, largely due to time‑zone challenges. Nevertheless, the focus has shifted to disseminating best practices across the global studio network.
The firm increasingly adopts a hybrid development model, supplementing core internal teams with external specialists—a strategy that proved effective for titles like Star Wars: Galactic Racer and is being explored for upcoming projects such as Expedition 33. Outsourcing decisions are driven by geography, cost, and expertise. For European studios, Tencent may route support through its UK‑based partner Sumo Digital, while acknowledging that the UK’s higher cost structure presents trade‑offs. This mirrors broader industry trends highlighted by Amir Satvat at Gamescom Dev, where development headcount is migrating from high‑cost regions like California to more affordable locales across Asia.
Zhu observes that North America is becoming increasingly challenging for studios without long‑standing, cohesive teams. He recounts his own experience at Activision, where a tightly knit Santa Monica group consistently delivered content year after year. In contrast, support functions benefit from being situated in lower‑cost regions, allowing Tencent to allocate resources efficiently. The rise of Chinese studios on the global stage was evident at Gamescom’s Opening Night Live, where polished titles from China showcased a potential power shift from West to East.
Zhu expresses optimism, noting that games such as Black Myth: Wukong have raised the bar for console and PC quality, inspiring Chinese developers to apply their mobile‑game expertise to higher‑end platforms. Improved tooling, particularly AI‑driven solutions, is accelerating this transition.
AI, according to Zhu, is not intended to replace developers but to amplify their productivity. Tencent leverages AI for concept art, rigging, motion matching, code review, and even project‑management bots that prompt team members about tasks.
He emphasizes that AI should be viewed as a genuine utility rather than a threat, likening its emergence to the internet’s early days. While the West remains cautious due to ethical, copyright, and player‑backlash concerns, Chinese developers appear more eager to adopt AI, seeing it as a natural extension of their toolset. Nonetheless, Zhu acknowledges unresolved issues surrounding generative‑AI copyright.
Tencent mitigates risk by ensuring AI models train exclusively on the company’s own assets, keeping data within its studios and negotiating strict agreements with tool providers to prevent external leakage. This safeguards intellectual property and avoids inadvertent duplication of content across different games. Backed by its parent conglomerate’s resources, Tencent Games can experiment across a wide spectrum of investments—from large‑scale AAA studios to niche indie partners. Recent moves include divesting from Bulkhead and Splash Damage, redirecting resources from Lightspeed, and announcing a minority stake in W4, the commercial arm of the Godot engine.
Zhu anticipates unveiling additional initiatives at the next Gamescom, but the underlying theme remains consistent: fostering sustained player engagement, whether through live‑service ecosystems or other game formats. As he puts it, "the more people love your game, the more they’ll play it," a principle that ultimately drives both player satisfaction and the bottom line.