Tencent’s overarching game strategy has become a topic of intense discussion across the industry, especially as the company doubles down on live‑service models, artificial‑intelligence tools, and the cultivation of evergreen titles. While many analysts have warned that an over‑reliance on live‑service could backfire—citing Sony’s recent missteps and the struggles of other developers chasing perpetual revenue streams—Tencent appears undeterred.
The firm believes that live‑service, when executed correctly, is the "holy grail" of modern gaming, a sentiment echoed by Yong‑yi Zhu, Vice‑President and Head of Operations, Strategy and Compliance for Tencent Games. Zhu points to Tencent’s own DNA—blockbuster titles such as *Honor of Kings*, *League of Legends*, and *Valorant*—as proof that games which evolve over time and foster deep community ties can deliver both financial stability and lasting player engagement. He argues that the goal is no longer to create a single hit that burns bright for a few months; instead, developers aim to embed their games into players’ daily lives, turning them into ongoing experiences rather than one‑off events.
Live‑service, however, is only one pillar of a broader, multi‑faceted approach. Since the last interview with GamesIndustry.biz, Tencent has undergone significant restructuring. Notably, UK‑based studios Splash Damage and Bulkhead have been spun off into independent entities, following a similar pattern with The Chinese Room and Secret Mode earlier in 2025. Zhu declined to detail the exact reasons for these separations but emphasized a core principle: a partnership must be mutually beneficial.
When the strategic fit is lacking—whether due to misaligned visions, cultural mismatches, or simply better opportunities for the studio on its own—Tencent prefers to step back, allowing the studio to thrive independently. The company acknowledges that not every acquisition will be a slam‑ dunk. Market conditions, cultural differences, and integration challenges can hinder the assimilation of new studios. Zhu admits that some purchases have proven difficult to meld into Tencent’s ecosystem, but he stresses that this is an expected risk in a portfolio as diverse as theirs.
A central tenet of Tencent’s roadmap is the development of evergreen IPs—games that can sustain relevance over many years. This includes both single‑player experiences, which are especially prominent in Tencent’s mobile catalog, and multiplayer titles that can continually expand through updates and community‑driven content. Zhu cites *Call of Duty* as an example of an evergreen franchise that evolves through successive installments while retaining a loyal fan base. The aim is to provide consistent, reliable revenue streams that avoid the boom‑and‑bust cycles often seen with premium, one‑off releases.
Stability is a recurring theme. Zhu observes that many high‑profile publishers have experienced volatile staffing swings—hiring en masse for a launch and then laying off large portions of the workforce when a title underperforms. Tencent strives to avoid such turbulence by fostering long‑term community building and steady content pipelines, thereby delivering a more predictable business model for both developers and investors.
Talent acquisition is another cornerstone of the strategy. Tencent seeks high‑quality developers whose expertise complements the company’s own strengths. The synergy between Tencent and its partners is essential; the firm offers resources such as regional publishing expertise, technical support, testing services, backend infrastructure, and data analytics.
In return, the studios bring creative vision and market‑specific knowledge. 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 needed to launch and sustain successful titles. For example, when Funcom’s *Dune Awakening* encountered technical hurdles, experts from Tencent’s Chinese and European teams embedded themselves alongside Funcom’s developers, troubleshooting issues in real time and, when appropriate, offering permanent positions to outstanding contributors.
Creative direction generally remains the domain of the individual studios, but Tencent steps in for cross‑studio challenges—such as optimizing Unreal Engine workflows or navigating publishing logistics in regions like the Middle East, North Africa, and Southeast Asia. This collaborative model allows studios to retain artistic autonomy while benefitting from Tencent’s global infrastructure.
The question of scale also arises. Some observers claim Tencent only pursues projects exceeding £50 million, yet Zhu refutes this, stating the company evaluates games of all sizes based on the studio’s trajectory and potential for growth.
He highlights minority‑stake investments in Larian Studios and FromSoftware as examples of how smaller, purpose‑driven projects can contribute to a broader portfolio, even if they never become blockbuster hits. Outsourcing and hybrid development models feature heavily in Tencent’s future outlook. The firm envisions core internal teams complemented by external specialists, a structure that proved effective for titles like *Star Wars: Galactic Racer* and the upcoming *Expedition 33*.
Decisions about staffing levels versus outsourced talent hinge on the need for precision work, geographic proximity, and cost considerations. For instance, Sumo Digital may support European studios due to timezone alignment, while UK‑based operations must weigh higher labor costs against the benefits of local collaboration. Industry trends reinforce this approach.
As Amir Satvat noted at Gamescom Dev, development headcount is migrating from expensive hubs such as California to more cost‑effective regions across Asia and Eastern Europe. Zhu concurs, noting that while North America remains a hotbed for tightly knit, veteran teams, support functions are increasingly being placed in lower‑cost locales without sacrificing quality. The rising prominence of Chinese studios on the global stage—exemplified by the polished showcases at Gamescom’s Opening Night Live—signals a potential power shift from West to East. Zhu expresses optimism, crediting games like *Black Myth: Wukong* for raising the bar for console and PC quality among Chinese developers, who traditionally excelled in mobile gaming and art outsourcing.
Improved tooling, especially AI‑driven solutions, is narrowing the gap further. AI, in particular, is a focal point of Tencent’s modernization efforts. Zhu stresses that AI is not intended to replace human creators but to augment their productivity.
By leveraging AI for concept art, rigging, motion matching, code review, and even project‑management bots within communication platforms, smaller teams can punch above their weight, delivering higher‑quality content more rapidly. He acknowledges ongoing challenges around copyright and data ownership, insisting that Tencent confines AI training data to its own libraries and negotiates strict agreements with tool providers to prevent external leakage of proprietary assets. In summary, Tencent’s long‑term game plan blends live‑service ambition with a diversified portfolio of evergreen IPs, strategic talent partnerships, flexible development models, and cutting‑edge AI tools.
While the company has recently divested from certain studios and redirected resources toward new investments—such as a minority stake in W4, the commercial partner behind the Godot engine—the central mission remains unchanged: keep players engaged, ensure they enjoy the experience, and ultimately translate that engagement into sustainable financial performance. The next Gamescom will likely reveal fresh projects that embody this philosophy, reinforcing Tencent’s commitment to a balanced, community‑centric future for gaming.