Tencent’s overarching game‑making strategy is gradually taking shape around three interlocking pillars: the pursuit of live‑service experiences, the integration of advanced AI tools, and the cultivation of evergreen intellectual property that can sustain long‑term player communities. In a recent, in‑depth conversation with Yong‑yi Zhu, Vice‑President and Head of Operations, Strategy and Compliance for Tencent Games, the company’s nuanced approach was laid out in detail, revealing how the Chinese tech giant balances ambition with pragmatism across its sprawling global portfolio. ### Live‑Service as a Core Objective, Not a Sole Focus Zhu opened the discussion by affirming that live‑service titles sit at the heart of Tencent’s aspirations. "Our holy grail is live service," he said, pointing to flagship properties such as *Honor of Kings*, *League of Legends* and *Valorant*—games that continually evolve, nurture vibrant ecosystems, and generate reliable recurring revenue.
These titles illustrate the company’s belief that successful games must become part of a player’s daily routine rather than a fleeting pastime. Nevertheless, Zhu was careful to stress that live service is only one component of a broader, diversified strategy. While the model offers stability and community‑building potential, Tencent also invests heavily in evergreen IPs—games that retain relevance over years, whether they are multiplayer experiences or single‑player adventures.
The firm views evergreen titles as the scaffolding that supports lasting engagement, allowing developers to iterate, expand, and keep audiences invested long after launch. ### Portfolio Realignment and Studio Autonomy Since the last interview a year ago, Tencent’s portfolio has undergone significant reshuffling.
UK‑based studios Splash Damage and Bulkhead have spun out as independent entities, following earlier separations of The Chinese Room and Secret Mode in early 2025. Zhu declined to discuss the specifics but explained that the decision hinged on strategic fit: "If a partnership doesn’t amplify the studio’s strengths or align with our long‑term goals, it may be better for the studio to operate on its own." He acknowledged that not every acquisition proceeds smoothly. Market conditions, cultural differences, and integration challenges sometimes prevent a seamless merger.
"Not everything is a slam dunk," Zhu admitted, underscoring that Tencent is prepared to accept occasional setbacks in pursuit of a balanced, resilient ecosystem. ### Supporting Studios with Global Resources Zhu’s remit covers roughly twenty studios spread across Europe, North America, and Oceania, including Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, Stunlock Studios, Digital Extremes, and Grinding Gear Games. His focus is less about geographic expansion and more about ensuring each studio has the tools, expertise, and market access needed to launch and sustain successful games.
Tencent offers a suite of services that can be customized for each partner: regional publishing expertise, technical support, quality‑assurance testing, backend infrastructure, and data‑driven analytics. A concrete example is the collaboration on *Dune Awakening*, where engineers from China and Europe worked side‑by‑side with Funcom’s developers to troubleshoot engine issues, refine gameplay mechanics, and, when appropriate, transition external consultants into permanent staff members. Creative direction, however, remains largely in the hands of the individual studios. Tencent typically intervenes only on cross‑studio technical challenges—such as optimizing Unreal Engine pipelines—or on region‑specific publishing hurdles, like navigating the regulatory landscapes of the Middle East, North Africa, or Southeast Asia.
### Balancing Live‑Service and Premium Projects When asked whether Tencent is shifting its emphasis toward larger live‑service ventures at the expense of smaller, premium titles, Zhu responded that the answer varies by studio. For instance, Funcom had already been operating the live‑service game *Conan Exiles* before Tencent’s investment, making continued support a natural extension of its existing DNA.
Conversely, other studios that experimented with live service but found limited success have reverted to focusing on premium, single‑player experiences—areas where they have historically excelled. The notion that Tencent only backs projects exceeding a £50 million budget was directly challenged by Zhu.
He clarified that the company evaluates games of all scales, weighing each studio’s developmental stage, long‑term vision, and cultural compatibility. "We do have small games in our portfolio," he said, citing Larian Studios and FromSoftware as inspirational “north stars.” Both companies own minority stakes in Tencent and have demonstrated that modest‑budget projects can evolve into purposeful, audience‑building franchises over time.
### The Role of AI as an Enabler, Not a Replacement A recurring theme throughout the interview was Tencent’s enthusiastic embrace of artificial intelligence as a productivity enhancer. Zhu emphasized that AI tools are intended to augment human creativity, not supplant it. From concept‑art generation and rigging to code review and motion‑matching, AI can accelerate iteration cycles, allowing lean development teams—often just 30‑40 people—to produce high‑quality content that rivals larger studios.
He noted that Chinese developers, having grown up alongside rapid AI advancements, tend to adopt these tools more readily than many Western counterparts, who may be more cautious due to ethical, copyright, and community‑reaction concerns. "People should not be afraid of AI," Zhu asserted, likening its emergence to the early days of the internet. He encouraged developers to view AI as a genuine utility that can streamline workflows, improve asset creation, and even assist with production management via automated Slack bots that track tasks and deadlines.
Nevertheless, Zhu recognized unresolved legal complexities surrounding AI‑generated content, particularly regarding ownership of material derived from external datasets. Tencent mitigates risk by restricting AI models to internal libraries and securing agreements with tool providers to prevent data leakage. This approach ensures that any AI‑produced assets remain firmly within the company’s intellectual‑property boundaries. ### Geographic Considerations and Outsourcing Strategies Location continues to play a pivotal role in Tencent’s outsourcing decisions.
While some studios benefit from distant partners that offer cost advantages, others prefer near‑shore collaborators to reduce latency and simplify coordination. For example, Sumo Digital may support European studios due to geographic proximity, even though the UK’s higher operating costs present a trade‑off. Zhu echoed industry observations that development talent is migrating from expensive hubs like California to more cost‑effective regions across Asia.
This shift aligns with Tencent’s broader aim to cultivate high‑quality talent worldwide while maintaining a flexible, hybrid model that blends core internal teams with external specialists when specialized expertise is required. ### Looking Ahead: A Continual Focus on Engagement Ultimately, Zhu distilled Tencent’s mission to a single, unifying principle: keep players engaged. Whether through live‑service updates, evergreen franchise expansions, or the strategic application of AI, the goal is to deliver experiences that captivate audiences and translate into sustained revenue.
"The more people love your game, the more they’ll play it," he concluded, underscoring the direct link between player satisfaction and the company’s bottom line. As Tencent continues to experiment—recently announcing a minority stake in W4, the commercial partner behind the open‑source Godot engine—the company’s strategy remains anchored in flexibility, collaboration, and a relentless focus on community‑driven engagement. The next Gamescom will likely showcase new projects that reflect this balanced approach, reinforcing Tencent’s position as a global catalyst for both live‑service ecosystems and timeless gaming experiences.