After years of aggressive investments, Tencent is reassessing its Japanese portfolio and could withdraw from several smaller holdings. The Chinese giant is not abandoning Japan, but future support will be reserved for studios it considers strategically valuable.

Just as they did in the West, many Asian studios looked abroad for major investments, acquisitions, and business partnerships. Tencent was one of the biggest players in that expansion, having acquired Riot Games and built stakes in Ubisoft, Remedy Entertainment, and Epic Games, while also investing in a number of Japanese companies it considered undervalued at the time. But Tencent’s finances are not limitless, and the company has become increasingly cautious about where it puts its money. Its Japanese investments are now under review.

According to Bloomberg, the Shenzhen-based company is evaluating minority stakes across numerous Asian studios, partly because the synergies that originally justified several of those investments have weakened or disappeared altogether. Many of the deals were struck around 2020, when Tencent aggressively expanded during the pandemic-era boom and bought into Japanese studios it saw as undervalued. Marvelous, the publisher behind franchises such as Story of Seasons and Rune Factory, could be among the companies most exposed to the new strategy after previously receiving substantial Chinese investment.

Tencent Is Not Leaving the Japanese Games Industry

Withdrawing funding from smaller studios does not mean Tencent intends to abandon Japan altogether. The company could still preserve, or even expand, its ties with major names such as PlatinumGames, FromSoftware, and Kadokawa, the parent company of Elden Ring developer FromSoftware. Tencent describes the move as part of a broader restructuring effort during a difficult period for the industry, shaped by the economic slowdown that followed the pandemic boom.

Investment levels remained high after the 2020 surge, but the returns have been wildly uneven. Tencent has therefore faced a prolonged slowdown in gaming while also committing vast amounts of capital to the AI race, where it is competing with Chinese rivals including Alibaba and ByteDance. That has forced the company to scrutinize which research projects and external investments can still deliver meaningful value in the medium and long term.

At the same time, Tencent is changing the way it works with international studios. Rather than acting mainly as a passive investor, it wants to take a more active role in co-producing games, contributing development resources, and helping to attract talent, but only within studios of “high strategic value.” The company is also showing a stronger interest in games built around user-generated content, following the model established by titles such as Minecraft and Roblox.

Source: 3DJuegos