The behemoth that is Tencent is one of the most dominant players in the game industry, but CEO and co-founder Pony Ma recently acknowledged that the competition is catching up and that recent game launches haven’t lived up to expectations.
Chinese outlet Jiemian (via Reuters) reports that Ma spoke about the threat from other Chinese gaming companies, which, like miHoYo and its global hits Genshin Impact and Honkai Star Rail, have seen greater success than Tencent’s offerings.
Speaking during Tencent’s annual meeting on Monday, Ma told attendees “gaming is our flagship business,” but that it had “faced significant challenges” over the last year. “We have found ourselves at a loss,” he added, “as our competitors continue to produce new products”. This has resulted in Tencent feeling like it has “achieved nothing”.
It’s worth noting, however, that as well as publishing games through its Tencent Games subdivision (and Level Infinite internationally), Tencent is also an investor in plenty of other studios and publishers. It owns a minority stake in Epic Games, for instance, as well as Baldur’s Gate 3 developer Larian, and holds majority stakes in developers like Techland. So it still maintains a great deal of influence, even if its recent publishing efforts haven’t quite paid off.
This influence has a knock-on effect when it comes to its competitors, too. Back in 2022, Xbox’s Phil Spencer discussed Microsoft’s acquisition strategy, stating that “This is such a competitive market, I don’t think we get to press pause on anything. Tencent is the largest gaming company on the planet today, and they continue to heavily invest in gaming content and game creators.”
Few tears will be shed over Tencent’s loosening grip, as there are understandable fears over one company having so much influence over the industry, though generally it tends to remain hands-off when it comes to the companies it’s invested in—at least publicly. It does, however, have a reputation for going very hard with microtransactions, particularly when it comes to mobile games. There are also concerns over its relationship with the CCP, which maintains a lot of influence over Chinese businesses.
Elsewhere in the speech, Ma touched on the subject of AI, claiming that Tencent has caught up with “first-tier companies”. Its focus is on integrating its Hunyuan AI model to improve the efficiency of its various businesses, however, rather than developing and selling AI products. It’s not clear how this will impact its gaming division, but it’s not hard to imagine this big AI push resulting in developers being gently encouraged to explore how AI could be integrated into games.