Tencent, the sprawling multinational that spent years gobbling up studios like Riot Games and Techland while investing in others including Ubisoft, Remedy, and FromSoftware, has chastized itself for becoming a passenger during 2023.
As reported by Reuters, Tencent CEO and co-founder Pony Ma indicated the company has been coasting along while its major competitors have been rolling out global hits.
Speaking at the company's annual meeting, Ma reiterated that video games remain Tencent's flagship business but suggested the company "achieved nothing" in the market over the past year.
"Gaming is our flagship business [...] but in the past year, we have faced significant challenges. We have found ourselves at a loss as our competitors continue to produce new products, leaving us feeling having achieved nothing," he said.
Tencent playing "catchup" on AI
Ma added that some of Tencent's latest releases have failed to meet internal expectations, but didn't specify which titles underwhelmed. He also suggested the company was until recently playing catch-up when it comes to AI tech, but is now able to "follow the pace" of leading rivals.
Ma said Tencent should be focused on leveraging its own 'Hunyuan' generative AI model across various businesses. It's unclear if that means the company's internal game studios will be encouraged to lean on the technology.
Tencent has been grappling with tightening playtime and spending regulations in China, resulting in the company investing in more western studios. In 2023 alone, Tencent became the majority shareholder of Dying Light maker Techland, sunk cash into new startups like Lighthouse Games, and led a $10 million investment into fitness game maker Quell.
More recently, however, Tencent subsidiary Riot Games laid off 530 workers after claiming it scaled up too quickly and overreached with a number of "big bets."
Corporate metrics are so fucking divorced from the creation of any actual value that it's baffling that it's legal. It's an economic wildfire and everybody just stands around throwing fuel on it in the name of 'growth'.
You know what cares about nothing but growth? Cancer.
And Indies are the cure.
Unfortunately Tencent also has fingers in "indie" pies. For example they own up to a third of Larian.
What does that stake get them? They own a bit of Grinding Gear Games (Path of Exile), and GGG has said Tencent basically gave GGG a big cash infusion in exchange for the rights to modify the game for the Chinese market, and they otherwise leave global game development alone. Ten cent is happy farming their Chinese gamers with p2w microtransactions, and from a user-perspective, the non-Chinese version of the game hasn't seemed to suffer from the arrangement.
"a bit' being 93.33%. Tencent has just, so far, been happy with letting the studios it owns do what they do and skim the profits, but they would have complete and total control of them if they wanted to. And obviously, don't anger China or you are fucked.