Tencent, China’s largest video game and social media company, has really failed to scale its popular products into the Western mainstream. Most of the giant’s international expansion has been achieved by investing in companies outside of China, but it is now increasing its presence abroad through its most lucrative business: video games.
In the past two years, Tencent has significantly expanded the presence of two of its most successful game studios, TiMi Studios and Lightspeed Studios, around the world, hiring local executives to run these overseas outposts.
To get an idea of how Tencent is managing its international gaming branches and what expectations it has for them, we spoke with Steve Martin, general manager of Lightspeed’s Los Angeles team. In addition to its base in China, Lightspeed now has offices in the US, Canada, Singapore, the UK, France, Japan, South Korea, New Zealand, and the United Arab Emirates.
intellectual property ambitions
Tencent is credited more for its ability to turn established PC games into popular mobile games than an original developer. Lightspeed, for example, made a name for himself designing the mobile version of PlayerUnknown’s Battlegrounds.
By May, PUBG Mobile had grossed $8 billion in global lifetime player spending, making it the second highest-earning mobile game in the world behind TiMi’s Honor of Kings, which itself is considered a League of Legends version of Riot.
Tencent now wants gamers to remember it for its own intellectual property. Led by 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.
While Martin declined to share details of the game, he did say that it will “reflect cultures and sensibilities around the world.” The game is scheduled to be completed in two to three years.
“What we are working on is very ambitious,” the executive told TechCrunch.
The success of PUBG Mobile is largely due to the large number of Chinese gamers. Lightspeed LA is clearly going after a more international crowd.
China’s console market 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 humble compared to mobile gaming and PCs, which generated $45.5 billion in revenue in 2021, according to industry researcher Niko Partners.
Tencent is known for its hands-off management approach towards its gaming portfolio companies, allowing them to operate autonomously while providing support when it sees fit.
He appears to be keeping the playbook for his internal study abroad. While Lightspeed LA gets access to technology and operational help from Tencent’s Shenzhen headquarters, in terms of creativity, it’s all done in the 83-employee Los Angeles office, which will eventually expand to a team of 200, Martin said.
After a decade at Rockstar, the gaming veteran joined Tencent because “there aren’t many big publishers that provide this level of creativity.”
Many of Tencent’s executives, including CEO Pony Ma and Chairman Martin Lau, are known to be gamers. “When we talk about games with management, it’s always about the games we love. I’ve had executives who don’t play at all,” Martin said.
Instead of having a single mastermind dictate most decisions in the studio, Martin oversees a collective of directors across disciplines from creative and animation to technical features. For example, when the studio chooses a soundtrack, the top leaders will discuss the options, but the decision rests with the audio director. This structure also removes the bottleneck of having 700 people asking a boss questions, Martin suggested.
“We want people to feel ownership of the game.”