Tencent Ma Xiaoyi: There are three major changes in the layout of overseas game strategies, and NFT games are still very early

Source | Coreesports

At present, microsoft, Sony and Embracer Group are expanding their power through the acquisition of game companies, such as Take-Two's acquisition of Zynga and Microsoft's plan to acquire Activision Blizzard. Faced with an increasingly fierce market competition environment, how can Tencent gain a firm foothold on the global game stage?

At present, accelerating the sea is the path that Tencent Games is exploring. Officially disclosed data shows that the proportion of overseas game revenue has reached 26%. After achieving good results in overseas markets, Tencent Games chose to continue to increase the number. Investing in overseas game studios is typical.

In the first quarter of this year, Tencent invested in six studios, such as Tequila Works, a game studio in Madrid, Spain, and Inflexion Games, developer of Nightingale. Coupled with earlier investments in Riot Games, Ubisoft, Activision Blizzard, Supercell and other companies, these portfolios give Tencent the confidence to fight for globalization.

In addition, Tencent is also actively opening overseas studios, which have landed in Montreal, Canada, Seattle and Los Angeles in the United States, and Liverpool in the United Kingdom. Officials hope that through studios all over the world, they can better stimulate creativity and seize the next wave of gameplay innovation.

Ma Xiaoyi, senior vice president of Tencent, revealed that the changes in overseas game strategies are mainly in three aspects. First, to create games for global players; second, to use the advantages of different platforms to create games; third, to combine the quality of AAA console games with emerging game genres.

He admits that achieving this strategy requires collaboration with excellent production teams in China and abroad. Focusing on the development of overseas markets, Ma Xiaoyi has spent 60% of his time in overseas markets in the past year. In the past, this proportion was only 20%.

How exactly does Ma Xiaoyi view opportunities in emerging markets? What are your views on trending technologies such as Metaverse, cloud gaming, and NFTs? Recently, in an exclusive interview with GamesBeat, Ma Xiaoyi answered the above questions in detail and explained how he understands the meaning of the game to the world. Here is the full text of the conversation, please enjoy:

Three major changes in overseas game strategy

GamesBeat: The last time we talked, you released 140 games in 200 countries, and 200 million players overseas were playing them. What are some interesting milestones for you since the development of Tencent?

Ma Xiaoyi: The epidemic has changed the world. At the same time, we are seeing some new market opportunities emerging. We have more players all over the world. At this point, I can't name an exact number, but it's much broader than it was when we last talked. Secondly, for Tencent as a whole, we are more focused on the global market than in 2019. While most of our players and revenue are still in China, we have a very large number of users outside the Chinese market compared to last year. Last year, we had 26% of our revenue coming from outside of China. This is an important milestone for us.

GamesBeat: Have your personal focus changed in the last few years?

Ma Xiaoyi: For me, what has changed is that I now spend more time in the global market. Previously, I only spent about 20% of my time overseas and most of my time in China. Right now, I spend 60% of my time in global markets.

GamesBeat: When people ask you how the game has changed over the past few years, is there an easy way to explain it and help people understand how different everything is now?

Ma Xiaoyi: In our opinion, this change mainly revolves around several things. First of all, we mainly focus on mobile game platforms. In the field of mobile games, the user base is much larger. We've seen some very high-quality games make their way into mobile platforms, such as Call of Duty Mobile and Protos. We've seen AAA quality games on mobile platforms, and that's a change over the last few years.

Second, emerging markets are developing rapidly. The Middle East, Southeast Asia, Latin America and other markets are growing very fast. This is similar to what we saw in the domestic market in 2012 or 2013, when the growth rate of the mobile market soared. The same thing is happening. This opens up new opportunities for the entire gaming industry.

We always talk about the genre of games because we think the core gameplay is the key to this industry. In terms of core gameplay, after PUBG MOBILE and Fortnite, we haven't seen anything as popular as battle royale games. We are still looking for this new gameplay. This is a key for us, the industry and gamers. It's what we need to look for.

GamesBeat: So you think gamers are about to see some sort of change in gameplay?

Ma Xiaoyi: Absolutely. It's just that innovating gameplay and new game types isn't that easy. Maybe we see it once or twice every decade. But it is not easy. Still, when we look at what's happening in the market, a lot of games have that potential. We cannot say that we already know the way to achieve it. But if you look at keywords like Roguelike, open-world sandbox, survival, and building, those keywords make some games very successful. We believe the next powerful game genre should be a combination of the above categories. It's not happening yet, but I'm sure people are looking for it.

GamesBeat: Tencent recently made some announcements, such as opening new studios in Los Angeles and Seattle, and the acquisition of Turtle Rock. What is the strategy behind these moves?

Ma Xiaoyi: First of all, we think we should make games for players around the world. Secondly, we are very open to all platforms, and we are trying to make games that take advantage of different platforms. At the same time, we're also seeing some emerging game genre trends, and we're trying to combine the quality of AAA PC, console games with new gameplay, which we believe is the key to creating the next big event. If we want to do this, we also need to collaborate with excellent production teams in China and abroad.

GamesBeat: Like many other game companies, do you have a hard time finding the professionals you need to make these games? Do you have to invest more in each game project?

Ma Xiaoyi: Now, to make high-quality games, the cost will be higher and higher. I don't think this trend will stop, people are always demanding higher quality. At the same time, this could slow down game development and innovation. For creative work, people need to work together face-to-face. In my opinion, the pandemic could lead to a 30% reduction in the efficiency of many game developments.

GamesBeat: How do you find developers who want to work with or for Tencent? It seems that you need to make a louder volume than ever before.

Ma Xiaoyi: The best way is always to encourage the people who develop the game and support their studios to make great games. We have a lot of resources. But I believe the way to communicate with the studio is to have a more balanced view of game development. If they believe in their direction, their gameplay, their ideas, their ideas, that's the starting point for a successful game. We are looking for teams and studios that have faith.

At the same time, we will try to use our resources to help them accomplish their goals. Sometimes your ideas, visions, and abilities are not on the same level, and we can help a lot in this part. We have a technology middle office, we have a network of studios all over the world, and they can help each other. We also keep a close eye on the market and maintain close ties with the player community. As a game company, Tencent firmly believes in the concept of community promotion. We listen to our players. We can help studios and development teams understand what they should do.

The most balanced way to develop a game is to let the team know what they want to do, what they can do, and what they should do. They need a balanced plan to make great games. That's what we're trying to communicate with developers. At the same time, this is also applied in our self-developed studio. As I often say, the core gameplay is the key to this market. We encourage all of our studios, all our developers, to look for their next big game in new game genres, such as League of Legends in MOBA or BATTLE Royale pubg, Fortnite.

As we've talked about before, when players want to experience big-budget games, the cost will also go up. We believe that Game as a Service (GaaS) is a great answer to market feedback. Now we are still in the early stages. Some games have problems with using GaaS mode. But we believe this is the future of the market. Again, part of the reason is that we believe in community push. We want all developers to be able to talk to their players, listen to their players, and interact well with their player base. This is the key to success.

Finally, while new markets are still on the rise, their preferences are very similar to the wind direction of mature markets. We believe that for the mass market, high-quality gaming is key. We're always happy to use our resources to support our developers in making high-quality games for the mass market.

NFT games are still very early

GamesBeat: What are the game trends you're most interested in right now?

Ma Xiaoyi: I was talking about emerging markets. If you look at the 2000 data, you'll find that there are about 100 million gamers worldwide. The last time we spoke was in 2019, when there were 1.8 billion players worldwide. Today, there are close to 2.5 billion players worldwide. This is a huge leap forward for the entire industry and a very good news. This means that some trends are changing.

Also, like I said before, all platforms are interconnected. From 2016 to 2018, mobile games and console games are two completely different worlds, and the game user base and practitioners are different. And now, we're seeing these two markets coming closer together.

GamesBeat: Square Enix sold its Western game studio and said it would focus on blockchain games, NFTs and other things being worked on in the future. How do you view investing in NFTs and blockchain strategically?

Ma Xiaoyi: This is a big problem. I think technology is a very important thing. I always say internally that for the gaming industry, the most important thing is gameplay. Then there's narrative, and finally there's technology. Gameplay is the key to getting fun in games. Narrative and storytelling are how you create a background, how you make people believe in a game. Technology is a transformative factor in the industry, and we see that change every decade or twenty years, perhaps a big technological change. The last change we saw was the arrival of mobile platforms, smartphones, and before that, probably 3D graphics. We're about to find new game-changing technologies. But something like the NFT is still in a very early stage. At the moment I don't see anything substantial, really game-changing.

For new technologies, if you want to have a big impact on the industry, it is usually because they produce new ways to play. 3D graphics have had a big impact on the industry as they have spawned new genres of games and new ways to play, such as first-person shooters. Today's NFTs, I don't yet see their impact on the game and the gaming experience.

At the same time, I believe in things like VR and AR. This technique could be an interesting area. We've invested some resources to try to help foster innovation in these areas. I mentioned that 3D graphics and mobile platforms are a big step forward and bring new experiences to players. Today, we also have some very exciting technologies in the VR space. We can track the player's movements, including their hands and eyes. Perspective solutions will allow people to interact with their environment while playing games. VR headsets will become smaller and lighter. We're seeing a real change in the experience of 4K OLED displays. This new technology could happen in the next three to five years. We believe we should be prepared for this kind of technological innovation, both in terms of platform and content. This is an interesting and exciting area for the entire gaming industry.

GamesBeat: Not only has it changed the game, it's changed the way we play the game, but it could potentially change the platform, like how players access the game. Do you have any thoughts on metavalse?

Ma Xiaoyi: That's why I love the game industry. If you look at the history of technological innovation, gaming is an industry that pushes technology to the extreme, but also to the mass market, to millions or billions of players. This has accelerated the development of technology. For metavalse, for the next generation of internet experiences, gaming will be an important part of driving the industry forward.

GamesBeat: Do you think players are also changing, that they want to create more of their own games? It seems that the rise of games like Roblox and Minecraft seems to indicate that this is a trend that deserves global attention.

Ma Xiaoyi: This is an interesting trend. We also believe that this is an area with great potential in the gaming industry. For NFTs, people always say they're going to decentralize everything, decentralize control and management. But I prefer to believe in opening up the ability to the player. If you look at what's going on in the game engine space, like Unreal Engine, these tools used to be used only by professionals. Only people who have worked in this industry for many years can use them with great skill. But we're already seeing more technology flow to indie developers. Now, if you have three or five people, you can develop complete games with very high quality and gameplay. This was previously unthinkable.

More and more of this technology, new platforms, will open up capabilities and development tools to players. If the player has these abilities, they will make their own things. People want to make things. That's why building is an important part of the game genre.

Recently, I had a meeting with Tim Sweeney to discuss issues like the metaverse. When we talk about the difference between games and metaversics? Admittedly, we play games and watch movies, but the metaverse is more like living in it, and we spend more time trying different things. This is very different from ordinary online games.

But seriously, the idea of a metaverse wasn't new, and the first online game I played was called Ultima Online back in 1997 or 1998. It already had a continuous world, almost as it does today's described metaverse. But at that point, the technical side wasn't ready. But now, the technology may soon be able to support it. That's why we can talk about metavalse today.

GamesBeat: One of the technologies I'm looking forward to is being able to jump from one game world to another in real time without waiting or downloading another game. Do you think the experience is still far away, or is it close?

Ma Xiaoyi: It may come soon. Cloud gaming can definitely achieve this. If you put everything in the cloud, users can get the experience of jumping from one game to another quickly, and everything will look incredible.

Now, though, cloud gaming has some problems. First, if you want to guarantee a high-quality experience for players, the cost is still high. We don't have the right business model to sustain that experience right now. Second, a new technology should have a native gameplay that is built around the technology, using all the advantages of the technology. But now the cloud games we're talking about are usually just streaming to current PCs, consoles, and mobile games. It's one thing you can do with it, but it's not the best thing. We need to bring native gameplay through cloud gaming.

It is a good thing that the game industry has set off a big merger and acquisition

GamesBeat: One of the interesting things is that some of the biggest companies in the world are coming into gaming. There's Tencent, Netflix, las Vegas Sands Group that's investing in some game studios, and Blackstone, and a lot of different big companies are taking notice of the game. What do you think of some of the changes that can occur after everyone's attention is attracted to the game?

Ma Xiaoyi: All the big Internet and technology companies know that what matters is the platform, the application and the content. If you look at all these things together, the game is important to them all.

GamesBeat: I've seen players react to big deals in the industry, like Microsoft's acquisition of Activision Blizzard, or Sony's acquisition of Bungie, and a lot of times I feel like players are worried about the changes that these deals might bring. Is there anything you can do to reassure them? Like this is a good thing for them, because anything changes?

Ma Xiaoyi: One thing players should understand is that the reason for this type of acquisition is that the development cost is getting bigger and bigger. Blizzard may be a special case, but many studios do get acquired. If you want to do a good game, an innovative game, a high-quality game, the development cost is probably $100 million, $200 million, $300 million. Small studios can't take that risk. They need the support of big companies, big platforms, and that's why these acquisitions happen. I think the result is obvious and we're going to get more high-quality games. This is a good thing for players.

Gaming is still an innovative industry, a creative industry. For Tencent, we were fortunate to have seized some big opportunities. We captured League of Legends in the MOBA space and PUBG in the tactical competitive game space. But these things all start with very small teams. The PUBG developers are from DayZ, from H1Z1, very small projects made by small teams, or even just individually. We will see more and more such opportunities.

As I said, technology is becoming more decentralized, reaching smaller teams and more people. In the future, indie developers will be more active in this industry. Of course, we see big companies moving constantly in the market. At the same time, thanks to the presence of platforms like YouTube and Twitch and Discord, we're seeing players increasingly direct access to developers. Developers can talk directly to players. The gaming community has never been stronger than it is today. One of the things I always say to our development team is, listen to their community and talk to them using every possible channel. Now, players are having a bigger impact on the industry and developers than ever before. This is a good opportunity for players.

GamesBeat: A broader question, how important do you think games are to the world?

Ma Xiaoyi: Internally, we discuss how to define a game. Now, games are something we play on a computer, game console, or mobile phone. You have a console where you're fighting, shooting or puzzle solving, but that's not part of the game. Games use information technology to create cultural entertainment. This has been happening since electronics entered the mass market 100 years ago. We have movies, TV, radio, etc. We believe that new technologies lead to continuous innovation.

As I said, games are often the first application of new technologies on the mass market. When I talk to people who work in the VR industry today and ask them what stage of development the game is in right now, they'll liken it to the Atari 2600s, back in the earliest days of video games in the 1970s. It was one of the first computing devices of any type to enter the mass market. Four or five years later, the IBM PC entered the market. Even today, if you look at all kinds of new technologies, whether it's meta-universes, cloud gaming, or VR, they all happened first in the gaming industry. Costs went down and people developed new applications. Then it spread to other industries. Gaming is the main driver of technology.

You can look at NVIDIA for example. NVIDIA is important to today's AI industry, and AI is important to all sorts of things. But Nvidia's starting point was in the game, making graphics cards for the game. This is a good example.

GamesBeat: It feels like Tencent's strategy in terms of gaming has always been very ambitious, but it also encourages creativity as much as possible.

Ma Xiaoyi: Of course. Creativity is always something we focus on. We're always looking for the next big innovation in gameplay and game genres. We're always trying to create new experiences. This is the only way to make this industry successful.

Overall, my understanding is that cloud gaming is an infrastructure in the metaverse.

This article is reprinted with permission, if you need to reprint, please contact the original source