"I think people should just not be afraid of AI"
Many column inches have been spent questioning the wisdom of focusing on live-service. Sony gambled and lost, as did many other companies chasing the dream of steady recurring revenues, while firms like Capcom that stuck to the traditional path have emerged relatively unscathed.
Highguard was one of the more recent live-service casualties, a game that was reportedly backed by the Tencent subsidiary TiMi Studio Group. But Tencent itself is not shying away from the glittering promise that live service titles bring.
"I think our holy grail is live service, right?" says Yong-yi Zhu, VP and head of operations, strategy and compliance at Tencent Games.
"You look at Tencent's DNA, it's Honor of Kings, League of Legends, Valorant. They're games that build upon themselves, and it provides stability to the studio, it builds communities. And I think more and more games are about not just engaging people for a short period of time, it becomes a lifestyle."
The firm's sprawling, constantly shifting portfolio aspires to support that lifestyle. But a wide-ranging conversation with Zhu confirms that live service is only one part of its strategy.
A lot has changed since GamesIndustry.biz last spoke with Zhu just under a year ago. The UK studios Splash Damage and Bulkhead have gone independent, following similar moves from The Chinese Room and Secret Mode earlier in 2025. Zhu won't go into details on the separation, but says "for certain studios we feel like we can't help them amplify their game."
"What's really big for us is: does the partnership make sense? Are we bringing something to the table as much as the developers are bringing something to the table? And I think in those cases, either there was potentially a lack of synergy" – in terms of the games aligning with the firm's long-term strategy – "or there were just better opportunities." Ultimately, the firm decided they were "better standalone than they are with Tencent."
Zhu is sanguine about not all of the company's many acquisitions working out. "There are certain situations where we acquire a studio and actually we have trouble integrating them because of market conditions or cultural differences," he says. "Not everything, at the end of the day, is going to be a slam dunk."
So what is the company strategy? Zhu says that evergreen titles are a key part of it – both single and multiplayer, with the former well-represented in the firm's mobile games portfolio – but ultimately "it's really about building sustainable communities long-term, having games that continue to engage with people." And while live service is the holy grail, it's not a singular focus. "It can be an IP that you build up," says Zhu. "This is not our game, but you look at Call of Duty: we consider that an evergreen IP, even though it's really one version after another."
The ultimate aim is consistency: "You look at a lot of premium games: I think in the past, you've seen a lot of ups and downs with companies that launch a game and have to lay people off. I think more and more we're trying to bring stability, and you typically don't see Tencent doing the same thing."
The other key part of Tencent's strategy is investing in "really high quality talent," says Zhu, again emphasising that "it has to be synergistic between Tencent and the developer."
Zhu runs ops and strategy for Tencent's global games business, and has around 20 studios in his division. That includes Miniclip, Sumo Digital, Funcom, Fat Shark, Sharkmob, 10 Chambers, and Stunlock Studios in Europe, as well as Digital Extremes in North America and Grinding Gear Games in New Zealand.
His focus is "less about places we're about to go, and more about how we ensure these studios are successful in the launches that they're about to have." That includes making sure each receives appropriate support from the wider Tencent ecosystem on things like regional publishing, technical support, testing, backend services, or analysis: "Things like that where we provide expertise, because we've done it as Tencent in the domestic market, and now we're trying to translate that into the global market," says Zhu.
He gives the example of experts from across China and Europe coming to help out on Dune Awakening. "They'll just sit alongside the devs at Funcom and work with them to solve the issues. And then afterwards, if it's an ongoing issue, sometimes they'll stick around. And sometimes we even say, 'Look, if it works out, the person can go to the studio and be a permanent employee'."
