Tencent is a global technology giant, with stakes in studios and companies like Riot Games, Ubisoft, Activision Blizzard, Supercell, Dontnod Entertainment, Bloober — and more seemingly every month. As they continue to negotiate strategic partnerships and stakes in companies the world over, the company has grown bigger than giants in the industry like EA and Nintendo, and has bankrolled some of the gaming world’s biggest hits. And they’ve got their sights on transforming the global market, says Global CEO Michelle Liu.
She sat down with Andrea Rene, director of operations at What’s Good Games, during a session at GamesBeat Summit 2022 to dive into the company’s current global strategy as their acquisitions keep coming, and the company keeps growing.
Building a global production system
The company’s major goal is to to build a worldwide ecosystem that integrates game development and publishing systems. In part, that means rather than absorbing the studios they acquire, Tencent aims to partner with them.
“We want to collaborate with developers around the world. That’s what we want to build: a production system all over the world,” Liu said. “Based on what we’re good at, we’re open to collaborating with all the best partners and building up a better ecosystem to explore the new world of the gaming industry.”
It’s a collaboration model built around supporting studio partners around the world in achieving their own growth objectives, Liu says. The goal is to help studios establish a strong long-term vision, and then give them the resources and creative autonomy necessary to build toward it.
“Each studio has a unique history and development culture, which we aim to keep by taking a tailored approach to collaboration, instead of building a one-size-fits-all model,” Liu says. “We’re quite confident that Tencent has built successful partnerships over the past decade, notably with companies like Riot, Supercell, Epic, and more. In those partnerships, the success is self-driven. The core teams at those companies are clear on what they want to accomplish, whether it’s launching new IP, growing existing IP, or building new technology. Tencent’s role is to enable, empower, and support with the resources and expertise that we have.”
Many of these studios have strong ambitions to create next-gen games and IP that are more immersive — and expensive — than anything they’ve created in the past. Tencent offers mobile development and operations expertise, and can support cross-platform efforts. For studios building live service titles, Tencent has experts in-house that help craft live operations plans, and assess content production needs, monetization models, and so on. For marketing and publishing initiatives, the company can leverage its global reach, which most developers and studios may struggle to achieve on their own. Finally, studios get technical support and solutions such as IT infrastructure and data analytics solutions, and access to core capabilities like games as a service, live ops, and esports capabilities.
Exploring new models and new mechanics
In a thriving game industry where change is a constant, Tencent is doing a lot of systemic restructuring of the global business to continue to stay on top. They’re building fully functional local publishing teams this year to actively manage publishing activities in each local market. That will help them pay more attention to local users and their needs, to help fuel both advertising and marketing as well as game development.
They’re also building out central functions at headquarters to supply off-the-shelf service capability and support to regional teams, as well as new ways to reach out to users through media and channels to connect them with products and gaming content directly and more freely. That includes leveraging esports not just as a marketing channel, but as a source of new creative content for users.
Local teams struggled during the pandemic, Liu says, but they’ve been building up their resources, and with the HQ team’s support, they’re making a lot of progress. They’ve seen a lot of success going online for physical events and esports tournaments, with positive feedback from users. The new approach has unlocked more opportunities to explore.
“The game industry is always evolving. Users are changing. Product content is changing. And yes, media is changing,” Liu said. There are always good opportunities for us to explore new models and new mechanics we can apply. We face a lot of changes, and we’re always thinking about it.”