Tencent’s strategic roadmap is built around three interlocking pillars: live‑service ecosystems, advanced AI tooling, and the cultivation of evergreen intellectual properties that can sustain long‑term player engagement. In a recent conversation, Yong‑yi Zhu, Vice President and head of Operations, Strategy and Compliance for Tencent Games, laid out how the company is balancing these elements while navigating the inevitable challenges of integration, cultural alignment, and market volatility.
Live service remains the centerpiece of Tencent’s ambition. Zhu likened it to the company’s "holy grail," pointing to the massive, self‑reinforcing loops that titles such as *Honor of Kings*, *League of Legends*, and *Valorant* have created. These games continuously generate revenue, nurture vibrant communities, and evolve into lifestyle platforms rather than fleeting entertainment bursts.
The firm’s vast, fluid portfolio is deliberately structured to support that lifestyle, offering players a seamless transition from one title to another within the Tencent ecosystem. However, Zhu was quick to stress that live service is only one facet of a broader strategy. Over the past year, several high‑profile studios—Splash Damage, Bulkhead, The Chinese Room, and Secret Mode—have been spun out of Tencent’s ownership.
While he did not disclose specific financial details, Zhu explained that the decision hinges on partnership fit: "If the collaboration does not amplify the game or align with our long‑term vision, we may opt for independence." He added that cultural mismatches or market conditions can make integration difficult, and not every acquisition will be a slam‑ dunk. Evergreen titles—both single‑player and multiplayer—are the second pillar. Zhu highlighted that many of Tencent’s mobile successes are essentially evergreen, delivering fresh content over years rather than a single launch. He cited *Call of Duty* as an example of an evergreen IP that evolves through successive iterations while retaining a core audience.
The goal, according to Zhu, is to build sustainable communities that keep players returning for years, thereby smoothing revenue cycles and reducing the boom‑and‑bust pattern common to premium‑only releases. Talent acquisition and synergy form the third pillar.
Tencent invests heavily in high‑quality development teams, but only when the relationship is mutually beneficial. Zhu oversees roughly twenty studios worldwide, including Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios, Digital Extremes, and Grinding Gear Games.
His focus is less on geographic expansion and more on ensuring each studio has the support it needs—regional publishing, technical assistance, backend infrastructure, and data analytics—to succeed in its upcoming launches. A concrete illustration of this support model is the collaboration on *Dune Awakening*.
Experts from Tencent’s China and Europe offices embedded themselves alongside Funcom’s developers, troubleshooting engine issues, refining gameplay, and even offering permanent employment to standout contributors. While creative direction remains the studio’s domain, Tencent steps in on cross‑studio challenges such as Unreal Engine optimization or navigating regional publishing hurdles in the Middle East, North Africa, and Southeast Asia. The conversation also touched on the size of projects Tencent is willing to back.
While Bulkhead’s CEO once claimed Tencent would not consider games under £50 million, Zhu disputed that notion, emphasizing a case‑by‑case approach. "We look at where the studio is on its journey and what its ultimate destination might be," he said.
Smaller titles do exist in the portfolio, and the company draws inspiration from partners like Larian Studios and FromSoftware—minority‑stake investments that have demonstrated how purposeful, incremental releases can build a loyal fanbase over time. Outsourcing and hybrid development models are gaining traction. Zhu referenced the successful external‑team collaboration on *Star Wars: Galactic Racer* and noted similar patterns emerging with projects like *Expedition 33*.
The key question, he explained, is how many core staff members to retain in‑house versus how many specialized tasks to outsource to vendors that can provide high‑precision work in specific locations. Geographic considerations, cost structures, and time‑zone alignment all factor into these decisions.
The shifting landscape of global development talent also features prominently in Zhu’s outlook. He observed that high‑cost regions such as California are losing headcount to more affordable hubs across Asia, a trend echoed by industry leaders like Amir Satvat.
For support functions, Zhu argues that maintaining a lean presence in expensive locales makes little sense; instead, Tencent leverages its worldwide network to deliver cost‑effective, high‑quality assistance. Chinese studios are increasingly making a splash on the global stage, a development Zhu welcomes. He praised titles like *Black Myth: Wukong* for raising the bar of console and PC quality, noting that Chinese developers who once specialized in mobile games are now mastering high‑fidelity production pipelines. This evolution is accelerated by better tooling, especially AI‑driven solutions that streamline iteration, concept art, rigging, motion matching, code review, and even production management via AI bots in communication platforms.
Zhu is an outspoken advocate for AI as an augmentative tool rather than a replacement for human creativity. He likens AI to the early internet—an inevitable technology that can boost efficiency when embraced thoughtfully. While Western developers may be cautious due to ethical, copyright, and community concerns, Zhu believes the industry should adopt a more open mindset. He stresses that Tencent encourages its partners to experiment with AI for tasks ranging from asset generation to workflow automation, provided the tools are used responsibly and data remains confined to internal repositories.
Intellectual‑property protection remains a priority. Tencent negotiates strict agreements with AI vendors to prevent proprietary data from leaking outside the company’s ecosystem.
This safeguards against scenarios where AI‑generated content inadvertently incorporates external copyrighted material, a legal gray area that the broader AI industry still needs to resolve. In summary, Tencent’s long‑term strategy intertwines live‑service ambition, evergreen IP cultivation, and AI‑enhanced development while maintaining a flexible, partnership‑first philosophy.
The company’s willingness to spin off studios that no longer align with its vision, its investment in talent that can thrive within a synergistic framework, and its proactive embrace of emerging technologies all point toward a future where player engagement—whether through persistent online worlds or high‑quality single‑player experiences—remains the core driver of sustainable growth.