Tencent, the biggest social networking and video games company in China, hasn't really managed to scale its popular products in the Western mainstream. The behemoth's international expansion for the most part has been achieved by investing in companies outside China, but now it's upping its on-the-ground presence abroad through its most lucrative business -- video games.
In 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 is managing its international gaming branches and what expectations it holds for them, we spoke to Steve Martin, general manager at Lightspeed's Los Angeles's outfit. Besides its base in China, Lightspeed now has offices in the U.S., Canada, Singapore, the U.K., France, Japan, South Korea, New Zealand and the UAE.
Tencent is credited more for its ability to turn established PC games into popular mobile plays than an original developer. Lightspeed, for example, made its name by devising the mobile version of PlayerUnknown's Battlegrounds.
By May, PUBG Mobile had grossed $8 billion in global lifetime player spending, making it the second top-grossing mobile game in the world trailing behind TiMi's Honor of Kings, which itself is regarded as a take on Riot's League of Legends.
Tencent now wants players to remember it by its own intellectual property. Under the helm of Martin, who was on the development team of Grand Theft Auto V and Red Dead Redemption 2 at Rockstar Games, Lightspeed L.A. office is working on a AAA console game targeting hardcore gamers around the world.
Steve Martin, general manager at Lightspeed L.A. Image Credits: Lightspeed L.A.
While Martin declined to share specifics of the game, he said it will "be reflective of cultures and sensitivities from across 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 thanks to its sheer number of Chinese players. Lightspeed L.A. 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 revenues in China last year, remains humble compared to mobile and PC games, which brought in $45.5 billion in revenues in 2021, according to industry researcher Niko Partners.
Tencent is known for its hands-off management approach toward its gaming portfolio companies, letting them operate autonomously while providing support as it sees fit.
It appears to be keeping the playbook for its in-house studios abroad. While Lightspeed L.A. gets access to tech and operational help from Tencent's Shenzhen headquarters, in terms of creativity, everything is done in the L.A. office of 83 employees, which will eventually expand to a team of 200, said Martin.
After a decade at Rockstar, the gaming veteran joined Tencent because "there aren't that many big publishers that give this level of creativity."
Many of Tencent's executives, including CEO Pony Ma and president Martin Lau, are known to be gamers themselves. "When we talk about games with the management, it's always about what games we love. I've had executives who don't play games at all," said Martin.
Rather than having one single mastermind dictating most decisions at the studio, Martin oversees a collective of directors across disciplines, from creative and animation to technical functions. For example, when the studio is choosing a soundtrack, the top leaders will discuss the options but the decision lies with the audio director. This structure also does away with the bottleneck of having 700 people posing questions to one boss, suggested Martin.
"We want people to feel ownership of the game."