Tencent, the largest social networking and video game company in China, hasn’t quite managed to scale its popular products into the western mainstream. The behemoth’s international expansion has largely been achieved by investing in companies outside of China, but now it is expanding its presence locally abroad through its most lucrative business – video games.
Over the past two years, Tencent has significantly expanded the footprint of two of its most successful gaming studios, TiMi Studios and Lightspeed Studios, around the world, hiring local executives to run these overseas outposts.
To get a glimpse of how Tencent manages its international gaming divisions and what expectations it has for them, we spoke to Steve Martin, general manager at Lightspeed’s Los Angeles outfit. In addition to its base in China, Lightspeed now has offices in the US, Canada, Singapore, UK, France, Japan, South Korea, New Zealand and the UAE.
Tencent is more credited for its ability to turn established PC games into popular mobile games than any original developer. For example, Lightspeed made a name for itself by creating the mobile version of PlayerUnknown’s Battlegrounds.
In May, PUBG Mobile grossed $8 billion in worldwide lifetime player spend, making it the second most profitable mobile game in the world after TiMi’s Honor of Kings, which itself is considered a take on Riot’s League of Legends.
Tencent now wants players to remember it through its own intellectual property. Under the helm of Martin, who was part of the Grand Theft Auto V and Red Dead Redemption 2 development team at Rockstar Games, the Lightspeed LA office is working on a AAA console game aimed at hardcore gamers around the world.
Although Martin declined to share details of the game, he said it will “reflect cultures and sensitivities from around the world.” The game should be ready in two to three years.
“What we’re working on is very ambitious,” the director told TBEN.
The success of PUBG Mobile is largely due to the sheer number of Chinese players. Lightspeed LA is clearly looking for a more international audience.
The console market in China is taking off after a 15-year ban that ended in 2015. But the industry, which generated $2 billion in revenue in China last year, remains modest compared to mobile and PC games, which will hit $20 billion in 2021. 45.5 billion in revenue, according to industry researcher Niko Partners.
Tencent is known for its hands-off management approach to its gaming portfolio companies, allowing them to operate autonomously and provide support as they see fit.
It seems to be keeping the script for its own studios abroad. While Lightspeed LA gets access to technical and operational help from Tencent’s headquarters in Shenzhen, creativity is all done in the LA office of 83 employees, which will eventually expand to a team of 200, Martin said.
After ten years at Rockstar, the gaming veteran joined Tencent because “there aren’t many big publishers that offer this level of creativity.”
Many of Tencent’s executives, including CEO Pony Ma and President Martin Lau, are known for being gamers themselves. “When we talk to management about games, it’s always about what games we love. I’ve had executives who don’t play games at all,” Martin says.
Rather than having one mastermind dictate most of the decisions in the studio, Martin oversees a collective of directors across disciplines, from creative and animation to technical functions. For example, if the studio chooses a soundtrack, the top leaders discuss the options, but the decision rests with the audio director. This structure also removes the bottleneck of 700 people asking questions to one boss, Martin suggested.
“We want people to feel ownership of the game.”