Tencent’s overarching plan for the future of gaming hinges on three interlocking pillars: the expansion of live‑service experiences, the strategic adoption of artificial‑intelligence tools, and the cultivation of evergreen intellectual properties that can sustain long‑term player engagement. In a recent, in‑depth discussion with Yong‑yi Zhu, Vice‑President and head of Operations, Strategy and Compliance for Tencent Games, the company’s nuanced approach to growth, acquisition, and studio support was laid out in detail. ### Live Service as a Core Objective, Not a Sole Focus Zhu openly acknowledges that live‑service titles represent the "holy grail" for Tencent.
He points to the firm’s own DNA—flagship games such as *Honor of Kings*, *League of Legends*, and *Valorant*—as proof that games that evolve over time and foster persistent communities provide both financial stability and a deeper connection with players. These titles are not merely one‑off experiences; they become part of a player’s daily routine, turning a game into a lifestyle. However, Zhu stresses that live service is only one component of a broader strategy.
While Tencent continues to back projects that promise recurring revenue, it also recognizes that not every studio or title fits this mold. Recent divestments, such as the spin‑offs of UK studios Splash Damage and Bulkhead, illustrate a willingness to let certain developers thrive independently when the partnership does not align with long‑term goals. Zhu explains that the decision to separate was based on a lack of strategic synergy rather than any failure on the part of the studios. ### Acquisitions: Balancing Integration with Autonomy Tencent’s aggressive acquisition history has brought a diverse array of studios under its umbrella, ranging from European developers like Sumo Digital and Funcom to North‑American powerhouses such as Digital Extremes.
Zhu admits that integrating new studios can be challenging, citing market conditions and cultural differences as potential roadblocks. Not every purchase will be a "slam dunk," but the company remains committed to learning from each experience.
Evergreen titles—whether single‑player experiences or multiplayer services—are a priority because they can nurture sustainable communities over many years. Zhu cites *Call of Duty* as an example of an evergreen IP that evolves through successive releases while retaining a loyal fan base. The goal is to avoid the boom‑and‑bust cycles that have plagued other premium games, where a single launch is followed by layoffs and uncertainty. ### Supporting Studios with Global Expertise Zhu’s remit includes oversight of roughly twenty studios worldwide.
His philosophy centers on providing the right kind of support rather than dictating creative direction. Tencent offers assistance in areas such as regional publishing, technical infrastructure, backend services, testing, and data analysis. For instance, when Funcom worked on *Dune Awakening*, experts from China and Europe collaborated directly with the development team, offering hands‑on problem solving and, in some cases, transitioning to permanent staff positions. Creative and artistic decisions remain the domain of each studio, but Tencent steps in when common technical challenges arise—such as optimizing Unreal Engine pipelines—or when navigating complex publishing landscapes in regions like the Middle East, North Africa, or Southeast Asia.
This hybrid model allows studios to retain their unique voices while benefiting from Tencent’s massive resources. ### Size Matters Less Than Fit Contrary to rumors that Tencent only backs projects exceeding £50 million, Zhu clarifies that the company evaluates games of all scales.
The key factor is the studio’s position on its development journey and whether Tencent’s expertise can accelerate growth. Smaller titles are indeed part of the portfolio, and the firm looks to nurture them when the cultural and strategic fit is right. Minority stakes in studios such as Larian Studios and FromSoftware serve as “north stars,” demonstrating that sustained, purposeful development—rather than sheer size—is what Tencent values. ### Outsourcing, Localization, and Global Talent The conversation also touched on Tencent’s evolving approach to outsourcing.
The company is experimenting with a model where a core internal team is supplemented by external specialists, a strategy that proved effective for projects like *Star Wars: Galactic Racer*. Decisions about where to source talent depend on factors such as time‑zone compatibility, cost, and the need for high‑precision work. For example, Sumo Digital may support European studios due to geographic proximity, even though the UK is an expensive location. This reflects a broader industry trend highlighted by Gamescom speaker Amir Satvat: development talent is shifting from high‑cost regions like California to more cost‑effective hubs across Asia and Eastern Europe.
Zhu agrees, noting that while North America remains a strong development hub for long‑standing teams, support functions benefit from being placed in less expensive locales. ### The Rise of Chinese Studios on the Global Stage Zhu observes a noticeable increase in the quality and ambition of Chinese developers. Titles such as *Black Myth: Wukong* have raised the bar for console and PC production, demonstrating that Chinese studios can now deliver experiences that rival Western AAA releases. This shift is driven by better tooling, higher standards, and a growing confidence in tackling high‑end projects.
### AI as an Enabler, Not a Replacement Artificial intelligence occupies a central place in Tencent’s vision for future development pipelines. Zhu emphasizes that AI is intended to augment human creators, making them more efficient rather than substituting them. Applications range from concept‑art generation and rigging to motion‑matching, code review, and even production‑management bots that automate routine tasks in communication platforms like Slack. He acknowledges ongoing concerns around copyright and the ethical use of generative AI.
Tencent mitigates these risks by restricting AI tools to internal data sets—ensuring that any generated content is derived from the company’s own IP libraries. Contracts with AI vendors explicitly prohibit the export of proprietary data, safeguarding against inadvertent leakage of Tencent’s assets.
### Looking Ahead: Experimentation and Engagement Backed by its massive parent corporation, Tencent Games is uniquely positioned to experiment across a spectrum of investments—from large‑scale AAA studios to niche indie developers. While recent moves have included pulling back from certain Western studios and making a minority investment in W4, the commercial partner of the open‑source Godot engine, the overarching theme remains consistent: keep players engaged.
Zhu concludes with a straightforward mantra: the more players enjoy a game, the longer they stay, and the healthier the bottom line becomes. Whether through live‑service ecosystems, evergreen franchises, or cutting‑edge AI tools, Tencent’s strategy is built around delivering lasting value to both developers and gamers worldwide.