Tencent’s bid to create the next FromSoftware and Larian

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In This Edition,
Tencent’s Yong-yi Zhu on…

• Building the next Larian

• Taking Chinese games global

• Heading to Hollywood

It’s been a month since we visited Gamescom, and one of the big takeaways from the event remains the sheer number of Chinese projects that were being shown.

“If you rewind five years, the focus of those Chinese companies had previously been mobile games,” explains Yong-yi Zhu, who is VP and head of operations, strategy and compliance at Tencent Games.

“They know what a good mobile game that succeeds in China looks like, and to a lesser extent, globally. Then Black Myth: Wukong [made by China-based developer Game Science] really upped the bar on console and PC and showed that Chinese developers are quite talented. Now they have a sense of what console and PC success in the West looks like, and that they can do it.”

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Zhu oversees around 20 international Tencent studios, and also supports the various developers that the company invests in globally. On top of that, his team is tasked with handling the release of Tencent’s Chinese games internationally. And I was eager to know how Tencent adapts its Chinese games for success overseas, if indeed it does that at all.

“It depends on the game,” Zhu answers. “Some games just resonate globally, while others are very regionally specific. Right now, we’re helping to publish Honor of Kings, which in China is the biggest game. Overseas, we’ve seen some regions where it resonates, partly because of the genre. MOBAs are big in certain regions and not so big in others. For us, it’s more about finding those pockets where it really resonates with a particular audience, and then understanding how we amplify that.

“Once we find an audience, we ask: ‘How do we put some of that culture in the game? How do we publish in a way that resonates more with the people living in that country?’”

There was a period of time when Tencent was investing heavily in companies outside of China. Although the company still does back global organizations (such as Ubisoft), there has been a drop in the number of deals being struck outside of its home country.

“We want to work with you if you believe one day you can be the category leader in this particular genre”

“If you look at our BD team, they are here [at Gamescom] and talking to everyone across all the different regions. Speculating, I bet they speak more now to Chinese developers because they’ve seen high-quality products.

“For us, it’s more about chasing high-quality talent and people bringing unique, specific visions. We love to work with developers who are trying to hone their craft. The studios we cite as our North Stars, like Larian and FromSoftware, have been in a particular genre for a long time, iterating on that genre. We try to do the same thing with our internal studios. We want to work with you if you believe one day you can be the category leader in this particular genre. That could be today, two games from now, or three games from now, as long as we see that progress. That is our long-term commitment.

“Looking at those two partnerships specifically, it wasn’t an overnight success. It was multiple Divinity titles into Baldur’s Gate. It was Demon’s Souls into Dark Souls into Bloodborne, and finally into Elden Ring.”

He continues: “We do have a long-game approach. That’s one thing that I think is very unique to Tencent.”

You can check out our full Tencent interview above, or alternatively read on for selected stories from our chat.

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Tencent exec surprised by AI interest from developers

Tencent frequently brings its teams together to share insight and seek support. In fact, just two weeks before Gamescom, it held an offsite event with all of its various studio CEOs.

And during that meeting, multiple studios were seeking guidance on how best to use AI.

“I was surprised,” says Zhu. “At this offsite, more people talked about leveraging AI than I would have expected. They were certainly more open to it.

“The AI that they’re using is very much in tools that are helping them scale up or do things they didn’t want to do anyway, all the way from concept art development, which is very common, to motion matching with faces and mocap, or automated rigging, or code review. Things that are taking time away from being creative. They recognize, ‘Hey, I have more time to iterate. And to create better, or even more, content.’

“All of our studios are in different phases regarding how much tooling they use. And we’ll try to get people to share their learnings. If a studio says, ‘I had a big hit doing this particular thing in my pipeline,’ we’ll ask them to write it up as a white paper or do a talk with a Q&A. Those are the things we try to foster.”

Tencent is advising teams to stay small for longer

Tencent’s studios range from Larian and Digital Extremes, to Sumo and Funcom. It operates single-player developers, live service teams, work-for-hire studios and everything in-between.

As a result, the games giant has an abundance of knowledge from across a wide spectrum of global teams. So, I asked Zhu what advice is he currently giving his developers?

“A lot of games in Tencent’s portfolio are evergreen live-service titles. And that helps with the ups and downs of the industry. If you are constantly connected with your community and have a very stable audience, then your workforce has the ability be more stable as well.

“There are situations where it’s more risky. Some teams are in concept phase or early pre-production. The lesson we’ve learned is that for the riskier part of the project, we should really cut down to the core of the team. What is the secret sauce of that team? That could be five people, 20 people, 75 people, whatever that may look like. It’s the group that should stay together. Once the creative nugget is all proven out and we get into production, that’s when we scale. And sometimes we will scale with internal teams, but more and more we’ll look at outsourced teams to scale up.”

However, Zhu adds. It’s important not to meddle too much.

“Part of our job is to… not steer them in the right direction, but make sure they don’t head down the wrong paths, because we know what doesn’t work.

“All games are unique. I do think there are certain things that are applicable across games, and other things that are really unique to that game, and it’s hard to tell until it happens.”

Tencent targets Hollywood

Yong-yi Zhu is based in Los Angeles. And as a result of his location, he’s found himself unexpectedly thrust into the world of Hollywood.

“Not many of our folks live in LA to cover this,” Zhu explains. “We have a team in LA that actually owns a number of IPs, including Conan the Barbarian. I got connected to them. At the time, they were looking for linear media opportunities, and now we’ve announced the Amazon series with Genndy [Tartakovsky].

“For me, it sparked a moment. Our studios are creating great IPs, or already have great IPs like Warframe or Path of Exile, but they’re still quite niche. The audiences are not as big as they could be. So, we asked, ‘hey, is there an opportunity to partner with storytellers to make the IPs resonate more with a broader audience?’

“The challenge is that it has to be authentic, and we find that the best opportunities are with storytellers who really engage with that IP.

TV and film is a concerted push by Tencent, Zhu says. But it’s not something its studios need to concern themselves with.

“We call it ‘change under the couch,’ because it’s not something the studios necessarily need to be focused on,” he concludes. “We bring them the opportunities, and obviously we don’t do anything without their consent.

“Hollywood is such a different place to navigate. And it’s not a skill [our studios] need to pick up. We’ll find the opportunities, ensure deals are signed properly, and make sure they get the control they need.

“It’s not just film and TV. This particular group also does comic books, statues, and all these opportunities. With a live-service game or evergreen IP, people want it as a form of lifestyle. They want the thing behind them in their Zoom meeting to show that they’re a fan of Conan or Warframe or whatever it might be.”

For the full chat with Tencent, check out the interview at the top of the page, via YouTube, or your podcasting platform of choice.