Tencent’s strategic outlook is anchored in three intertwined pillars: live‑service ecosystems, artificial‑intelligence‑enhanced development, and the cultivation of evergreen intellectual property. While industry commentators have long debated the wisdom of chasing recurring‑revenue models, the Chinese conglomerate remains steadfast in its belief that live‑service games represent the most reliable path to sustained engagement and financial stability.
Yong‑yi Zhu, vice‑president and head of operations, strategy and compliance for Tencent Games, summed it up succinctly: "Our holy grail is live service. Look at our DNA—Honor of Kings, League of Legends, Valorant—these titles evolve over time, create lasting communities, and become part of players’ daily lives." Zhu’s remarks come after a turbulent period for several of Tencent’s recent live‑service experiments. The high‑profile failure of Highguard, a title backed by the TiMi Studio Group, underscored the risks inherent in the model. Yet the company does not see this as a reason to retreat.
Instead, it views live‑service as one component of a broader, flexible strategy that also embraces single‑player experiences, premium releases, and long‑term community building. "Evergreen titles, whether multiplayer or solo, are essential," Zhu explained.
"The goal is to keep players connected to a game for years, not just weeks." The past year has also seen Tencent reevaluate its portfolio of acquired studios. UK‑based Splash Damage and Bulkhead were spun out as independent entities, following similar moves with The Chinese Room and Secret Mode earlier in 2025.
Zhu declined to detail the negotiations, but emphasized a simple principle: a partnership must be mutually beneficial. "If the studio’s vision doesn’t align with our long‑term plan, or if there are cultural or market‑fit challenges, we may decide the studio is better off on its own," he said.
He acknowledged that integration can be difficult, especially when market conditions shift or cultural differences arise, and admitted that not every acquisition will be a home‑run. Beyond live‑service, Tencent is heavily investing in talent and expertise.
Zhu oversees roughly twenty studios worldwide, including Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios in Europe, Digital Extremes in North America, and Grinding Gear Games in New Zealand. His focus is less about geographic expansion and more about ensuring each studio has the resources it needs to launch successfully.
This support can take many forms: regional publishing assistance, technical troubleshooting, backend infrastructure, data analytics, and even on‑site collaboration. Zhu cited the example of experts from China and Europe working side‑by‑side with Funcom on the live‑service title Dune Awakening, sometimes staying on as permanent staff if the partnership proves valuable. Creative direction, however, remains largely in the hands of individual studios. Tencent steps in only for cross‑studio challenges, such as optimizing Unreal Engine pipelines or navigating publishing logistics in regions like the Middle East, North Africa, or Southeast Asia.
When asked whether Tencent is shifting its focus toward larger live‑service projects at the expense of smaller, premium games, Zhu responded that the decision is studio‑specific. Funcom, for instance, already operated the live‑service Conan Exiles before Tencent’s investment, so the partnership naturally supports that model. Other studios that attempted live‑service and struggled have pivoted back to premium titles, which remain their core competency.
Contrary to rumors that Tencent only backs games with budgets exceeding £50 million, Zhu clarified that the company evaluates projects of all scales. "We look at where a studio is on its journey and what its ultimate destination might be. If we can help them grow, we’ll do it, regardless of size," he said.
He highlighted minority stakes in Larian Studios and FromSoftware as examples of investments in studios that produce purposeful, audience‑building games over many years, even if each individual title isn’t a blockbuster. Collaboration across time zones remains a logistical hurdle. Earlier plans to merge Tencent’s Chinese and Western support teams have progressed more slowly than hoped, prompting a shift toward knowledge‑sharing across the global network.
Zhu envisions a hybrid development model where core teams are supplemented by external specialists—a strategy that proved effective for titles like Star Wars: Galactic Racer and is being considered for upcoming projects such as Expedition 33. Outsourcing decisions are guided by geography, cost, and expertise. European studios may receive support from Sumo Digital due to proximity, while UK‑based operations face higher labor costs, creating trade‑offs that each studio must weigh.
This mirrors broader industry trends highlighted by Amir Satvat at Gamescom Dev, where development talent is migrating from expensive hubs like California to more cost‑effective regions in Asia. Zhu also addressed the rising prominence of Chinese developers on the global stage.
The impressive technical quality of games like Black Myth: Wukong has raised expectations for console and PC titles from China, which historically focused on mobile experiences and art outsourcing. Improved tooling, particularly AI‑driven solutions, is narrowing the gap.
"AI helps us iterate faster and produce higher‑quality content with smaller teams," Zhu explained. He stressed that AI is a productivity enhancer, not a replacement for human creators. Tencent encourages developers to experiment with AI for concept art, rigging, motion matching, code review, and even project‑management bots, while maintaining strict data‑ownership policies to protect intellectual property.
Ethical and legal concerns around generative AI remain unresolved, especially regarding copyright. Zhu believes the industry must develop clear guidelines, and Tencent safeguards its own data by ensuring AI tools only train on in‑house assets. This precaution prevents unintended leakage of proprietary content into external games. In summary, Tencent’s long‑term game plan is built on a flexible framework that balances live‑service ambitions with evergreen IP development, talent cultivation, and strategic use of AI.
While the company has divested from some studios, it continues to place bets across a spectrum of sizes and genres, leveraging its massive ecosystem to provide publishing, technical, and analytical support. As Zhu concluded, the ultimate metric is player engagement: "The more people love and keep playing your game, the better the bottom line for everyone involved."