Tencent’s strategic outlook is built around three interlocking pillars: live‑service ecosystems, advanced AI tooling, and the cultivation of evergreen IPs that can sustain long‑term player engagement. While the industry has witnessed numerous missteps—Sony’s costly gamble on recurring‑revenue models and the collapse of several live‑service experiments—Tencent remains convinced that the live‑service model, when executed correctly, can serve as a stable revenue engine and a community‑building platform. Yong‑yi Zhu, Vice‑President and head of operations, strategy and compliance for Tencent Games, summed it up succinctly: live service is the company’s "holy grail," but it is only one component of a broader, multifaceted plan. Zhu points to Tencent’s DNA—titles such as *Honor of Kings*, *League of Legends* and *Valorant*—as evidence that games that evolve over time and nurture player communities provide a reliable foundation for studios.
These games are not merely short‑term experiences; they become part of players’ daily routines, turning a single product into a lifestyle offering. The firm’s extensive, ever‑shifting portfolio is designed to support that lifestyle, yet Zhu stresses that live‑service ambitions must align with each studio’s strengths and the company’s overall vision.
Since the last interview with GamesIndustry.biz, Tencent has undergone notable restructuring. UK‑based studios Splash Damage and Bulkhead have spun out as independent entities, echoing earlier moves by The Chinese Room and Secret Mode in 2025. Zhu declined to disclose specifics, but explained that Tencent evaluates every partnership through a lens of mutual benefit: "Does the partnership make sense? Are we adding value as much as the developers are?" When synergy is lacking or better opportunities arise elsewhere, the company may opt to let a studio thrive on its own.
He acknowledges that not every acquisition yields a seamless integration; market conditions, cultural differences, and divergent strategic goals can complicate the process. Evergreen titles—both single‑player and multiplayer—are a core focus. Mobile games dominate the single‑player segment of Tencent’s catalog, while multiplayer experiences aim to foster durable communities. Zhu cites *Call of Duty* as an example of an evergreen IP that persists through iterative releases, demonstrating that a franchise can remain relevant even when each new entry is technically a separate product.
Stability is another recurring theme. In the past, many premium developers experienced boom‑and‑bust cycles, hiring aggressively for a launch and then laying off staff when revenue waned.
Tencent seeks to avoid that volatility by providing consistent support across its network of studios. This support includes regional publishing expertise, technical assistance, testing services, backend infrastructure, and data‑driven analysis—essentially translating the company’s domestic market know‑how to global markets. Zhu illustrated this collaborative approach with the example of *Dune Awakening*.
Experts from China and Europe were dispatched to work side‑by‑side with Funcom’s developers, tackling technical challenges and, when appropriate, transitioning some consultants into permanent staff. While creative direction generally stays with the individual studio, Tencent steps in on cross‑studio concerns such as Unreal Engine optimization, regional compliance, and distribution logistics in markets like the Middle East, North Africa, and Southeast Asia.
The question of scale also arises. Some observers claim Tencent only pursues projects exceeding £50 million, but Zhu disputes that notion.
He emphasizes that the company evaluates games of all sizes based on the studio’s stage of development and long‑term potential. Smaller titles are present in Tencent’s portfolio, and the firm aims to help them grow, provided cultural and technical compatibility exist. Investments in minority stakes—such as those in Larian Studios and FromSoftware—serve as “north stars” for Tencent.
These partners have built their reputations gradually, focusing on craftsmanship and audience cultivation rather than chasing blockbuster sales. Their trajectories exemplify how a studio can expand its reach while staying true to its core competencies. Outsourcing and hybrid development models are also gaining traction. Tencent is experimenting with core internal teams supplemented by external vendors, a strategy that proved effective for titles like *Star Wars: Galactic Racer* and the upcoming *Expedition 33*.
The balance between in‑house talent and outsourced expertise depends on factors such as geographic proximity, cost considerations, and the need for specialized skills. For instance, Sumo Digital may support European studios due to time‑zone alignment, even though operating out of the UK carries higher expenses. Geographic shifts in talent pools are evident across the industry.
As Amir Satvat highlighted at Gamescom Dev, development headcount is moving from high‑cost regions like California to more affordable locations throughout Asia. Zhu concurs, noting that maintaining large development teams in expensive markets is increasingly untenable, whereas support functions can be distributed globally without sacrificing efficiency. Chinese studios are also gaining prominence on the world stage. The success of games like *Black Myth: Wukong* has raised the bar for console and PC quality, encouraging Chinese developers to apply their mobile‑game expertise to higher‑end platforms.
Zhu believes that better tooling—particularly AI‑driven solutions—has lowered the barriers for these studios to produce world‑class content. AI, in Zhu’s view, is a productivity enhancer rather than a replacement for human creators. Tencent encourages developers to adopt AI for tasks ranging from concept art generation and rigging to code review and production management. AI‑powered bots can even automate routine communications within development pipelines.
However, he acknowledges ongoing challenges around copyright and data ownership. Tencent mitigates these risks by ensuring that AI tools are trained exclusively on internal assets and by negotiating strict data‑usage agreements with vendors, thereby preventing inadvertent leakage of proprietary content. Overall, Tencent’s strategy is about sustaining engagement, whether through live‑service models, premium single‑player experiences, or AI‑augmented workflows. Zhu concludes that the ultimate metric is player enjoyment, which directly translates to financial performance: "The more people love your game, the more they’ll play it, and that drives the bottom line."