Tencent’s overarching plan for the future of gaming is built around three main pillars: live‑service experiences, the strategic use of artificial‑intelligence tools, and the cultivation of evergreen intellectual properties that can thrive across platforms and generations. 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 to growth and sustainability was laid out in detail. The Live‑Service Imperative Zhu opened the discussion by acknowledging the industry’s fascination with live‑service models, describing them as the "holy grail" for modern developers. He pointed to Tencent’s own DNA—titles such as Honor of Kings, League of Legends, and Valorant—as proof that games that evolve over time and foster persistent communities can generate stable, recurring revenue streams.
These games are not merely short‑term attractions; they become part of players’ daily routines, turning a single title into a lifestyle. However, Zhu was quick to stress that live service is only one facet of a broader strategy. While Tencent continues to back ambitious live‑service projects, the company also recognizes that not every studio or title fits that mold.
The recent failure of Highguard, a live‑service game reportedly supported by TiMi Studio Group, illustrates the risks involved. Yet Tencent remains undeterred, believing that the long‑term benefits of well‑executed live services outweigh occasional setbacks. Strategic Partnerships and Studio Autonomy Since the last interview a year ago, Tencent has reshaped its portfolio.
Notable UK studios Splash Damage and Bulkhead have spun out as independent entities, following earlier separations of The Chinese Room and Secret Mode in 2025. Zhu explained that these moves were driven by a careful assessment of synergy: "If the partnership doesn’t amplify the game or align with our long‑term goals, it may be better for the studio to stand alone." He admitted that integrating newly acquired studios can be challenging, citing market conditions and cultural differences as common obstacles. "Not everything is a slam dunk," he said, underscoring the company’s realistic view of M&A outcomes.
The key, according to Zhu, is to focus on studios that can contribute to sustainable communities—whether they are single‑player experiences, multiplayer titles, or hybrid models. Evergreen IPs and Community Building Evergreen titles, both solo and multiplayer, occupy a central place in Tencent’s roadmap. Zhu highlighted that these games are designed to retain player interest over years, continually delivering new content, events, and updates.
He cited Call of Duty as an example of an evergreen franchise that evolves through successive releases while maintaining a loyal fan base. The ultimate objective is consistency. Zhu contrasted Tencent’s approach with the boom‑and‑bust cycles seen at many premium studios, where a single hit can be followed by layoffs and uncertainty.
"We aim to bring stability," he said, "to keep teams employed and games alive for the long haul." Talent Investment and Global Support Another cornerstone of Tencent’s plan is the recruitment and nurturing of high‑quality talent worldwide. Zhu emphasized that successful collaborations require mutual benefit: "Both Tencent and the developer must bring something valuable to the table." His division oversees roughly twenty studios across the globe, 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.
The focus is less on geographic expansion and more on ensuring each studio has the resources it needs to launch and sustain its games. This includes regional publishing expertise, technical assistance, testing, backend infrastructure, and data analytics. Zhu illustrated this with a concrete example: experts from Tencent’s China and Europe teams worked alongside Funcom on the live‑service title Dune Awakening, offering hands‑on troubleshooting and, in some cases, transitioning consultants into permanent staff members. While creative direction generally stays with the individual studio, Tencent steps in on cross‑studio challenges such as Unreal Engine optimization or navigating publishing in complex regions like the Middle East, North Africa, and Southeast Asia.
Balancing Scale: From AAA to Indie When asked whether Tencent favors large, blockbuster projects over smaller ventures, Zhu clarified that scale is not the primary filter. He referenced a comment from Bulkhead’s CEO, Joe Brammer, who claimed Tencent would not consider games under £50 million, but Zhu disputed that notion. "We look at games of all sizes," he said.
"What matters is where the studio is on its journey and whether we can help them grow." Tencent’s portfolio already includes smaller titles, and the company cites Larian Studios and FromSoftware—both minority‑owned by Tencent—as examples of studios that have built successful, purpose‑driven games over time without relying on massive budgets. The focus is on craftsmanship, audience development, and the ability to iterate and improve.
Cross‑Regional Collaboration and Outsourcing Zhu acknowledged that integrating Chinese and Western operations has proven more difficult than anticipated, largely due to time‑zone differences. Instead, the emphasis has shifted to sharing best practices across studios. He envisions a hybrid development model where core teams are supplemented by external specialists, a strategy that proved effective for Star Wars: Galactic Racer and is being explored for upcoming projects like Expedition 33.
Outsourcing decisions are guided by location, cost, and expertise. For instance, Sumo Digital may support European studios because of proximity, while the UK’s higher cost base presents trade‑offs. 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. The East‑West Power Shift and AI Adoption The recent Gamescom Opening Night Live, which showcased polished titles from Chinese developers, signals a possible shift in industry influence toward the East.
Zhu expressed optimism, noting that games such as Black Myth: Wukong have raised the bar for console and PC quality, inspiring Chinese studios to aim higher. Artificial intelligence plays a pivotal role in this evolution. Zhu described AI as a productivity enhancer rather than a replacement for human creators.
By leveraging AI for concept art, rigging, motion matching, code review, and even project‑management bots in Slack, Tencent’s developers can produce higher‑quality content with smaller, more agile teams. He emphasized that Chinese developers, having grown up with AI tools, are especially adept at integrating them into their pipelines. In the West, adoption has been slower due to ethical, copyright, and community concerns. Zhu urged developers not to fear AI, likening it to the internet’s early days: a transformative technology that, when used responsibly, can boost efficiency.
He stressed the importance of keeping AI‑generated data within the company’s own libraries to avoid IP infringement, and Tencent has formal agreements with tool providers to ensure data remains confined to internal use. Future Outlook Backed by the financial might of its parent company, Tencent Games can experiment across a spectrum of investments, from large‑scale AAA studios to niche indie developers. While recent divestments—such as the spin‑outs of Bulkhead and Splash Damage and the redirection of Lightspeed—show a willingness to recalibrate, the company also announced a minority stake in W4, the commercial partner behind the open‑source Godot engine, indicating continued interest in diverse development ecosystems.
Zhu summed up the overarching mission: "My role sits at the intersection of games and the broader Tencent ecosystem, and my constant question is how we keep players engaged and having fun. In the end, that translates directly to the bottom line—the more people love your game, the more they will play it." In summary, Tencent’s long‑term strategy blends live‑service ambition with a commitment to evergreen IPs, strategic talent acquisition, global studio support, flexible outsourcing, and the thoughtful integration of AI tools.
This multifaceted approach aims to create stable, engaging experiences that can endure in an ever‑changing market, while also positioning Tencent as a bridge between Eastern innovation and Western market dynamics.