Last year, Ma Xiaoyi spent 60% of his time overseas, what was he looking for?

Recently, Gamebeat, a foreign network game media, interviewed Ma Xiaoyi, senior vice president of Tencent, who discussed the time of large acquisitions in the game market in recent years, and also mentioned many of Tencent's views on the current situation and future of the game industry.

Tencent has become the world's largest game company, and at the same time, we are also seeing competitors such as Microsoft, Sony and Empirer Group also acquiring game companies in large numbers in an effort to become bigger and more competitive.

Ma Xiaoyi, senior vice president of Tencent, explained why we saw so many changes, such as Take-Two's acquisition of Zynga and Microsoft's acquisition of Activision Blizzard. Tencent, which owns stakes in companies such as Riot Games, Ubisoft, Activision Blizzard, Supercell, Dontnod Entertainment and Bloomber, can clearly see more with a global perspective.

Tencent wants to give players boutique games, and they often cost $100 million to $300 million or more, far more than some smaller game studios can afford, and this is also the case with mobile games as the mobile game market grows. That's why big companies like Tencent are buying up studios, which want to provide the necessary funding for the games the studios are making. That's why this acquisition is good for gamers, Ma said.

He pointed out that since the last interview with Gamebeat in 2019, Tencent has entered the global gaming scene more deeply. Last year, 26% of Tencent's revenue came from overseas markets, and this trend will accelerate in the future, which explains why Ma Xiaoyi spends about 60% of his time overseas, what is he looking for? The answer is new innovations in gameplay, new game genres, and exciting game products that excite gamers and move the industry forward.

Tencent also recently acquired Turtle Rock, the developer of The Back 4 Blood and Left 4 Dead games, and opened new AAA game studios in Montreal, Seattle and Los Angeles. While they are expanding rapidly, they must also be careful to focus on supporting the right team. We talked a lot about acquisitions and investments, opening new studios, including metaversities and NFTs.

The following is a compilation of the interview content of the mobile game, which has been deleted to ensure smooth reading:

GamesBeat: When we last interviewed, Tencent had 140 games and 200 million players in 200 countries overseas, what are the interesting milestones now?

Orion: Of course there is, the pandemic has changed the world. New markets are on the rise, and we now have more players around the world, and while we can't reveal exact numbers, they're much bigger than we last interviewed.

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, last year, we also saw a significant increase in the number of users outside of China. Last year, 26% of our game revenue came from outside of China, which was an important milestone for us.

GamesBeat: Have your responsibilities and priorities changed over the past few years?

Orion: No. But one thing that has changed for me is that I now spend more time focusing on the global market. Previously, I only spent 20% of my time overseas to focus on the market, and most of my time was spent in China. Right now, I spend about 60% of my time focusing on global markets.

GamesBeat: From your perspective, how the game market has changed in the past few years, can you briefly talk about it?

Orion: From our perspective, the changes revolve around a few key points.

First of all, we mainly focus on mobile game platforms, which have a large user base. We've seen some very high-quality games enter mobile platforms, such as Call of Duty Mobile and Protos. We're seeing the emergence of AAA products on mobile platforms. This has changed over the past few years.

Second, emerging markets are growing rapidly. Markets like the Middle East, Southeast Asia, and Latin America are growing very fast. This is similar to the trend we saw in China in 2012 or 2013, when the Chinese mobile game market was booming. The same thing is happening in these emerging markets, which opens up new opportunities for the entire gaming industry.

We often talk about the gaming category because we believe that core gameplay is the key to the progress of the industry. We haven't seen a case of core gameplay having a huge impact on the gaming industry until PUBG and Fortnite arrive. This hasn't happened again in recent years, but we're still looking for this disruptive new gameplay. This is key for us, the industry and gamers.

GamesBeat: So you think gamers are ready to embrace some changes in gameplay?

Orion: The answer is yes, this new way of playing and innovating at the new genre level is not so easy. Maybe we see it once or twice every decade, but when we look at the market, a lot of games have that potential. We cannot say that some formulas for achieving this goal are already known. But you can see roguelike, open-world sandbox, survival, and crafting, and these keywords make some games very successful. We believe that the next blockbuster genre should be some combination of several elements in the group.

GamesBeat: Tencent has had a lot of news lately, like new studios built in Los Angeles and Seattle, and the acquisition of Turtle Rock. What kind of strategy are you pursuing?

Orion: We think we should launch gaming products for players around the world. We have a very large number of players in China, very strong data in emerging markets, and good numbers in mature markets such as the United States and Western Europe. We are increasingly seeing players around the world playing the same type of game and having the same high demands on game quality.

First of all, our strategy change is to try to make games for players around the world, and we believe that no matter where the players are, whether it's in China, Brazil or North America, their needs are fundamentally the same.

Secondly, we are very open to all platforms. Of course, the largest player audience is on mobile platforms, but the PC market also has a lot of hardcore player communities, which is the best place for us to create better games by working with communities. At the same time, the console plus a big TV can bring players the best gaming experience. We are working hard to make games that can take advantage of the advantages of different platforms.

At the same time, we're also seeing some trends in new game genres, as well as some keywords with potential. We believe that this innovation should be combined with very high-quality technology. We'll try to combine the quality of AAA PC games and console games with new gameplay, which we believe is key to creating the next blockbuster. If we want to do this, we need teams in China and overseas who are committed to this work.

GamesBeat: Like many other game companies today, wouldn't it be difficult for you to find the talent you need to make these games? Do I have to invest more money in each product?

Orion: Yes. Now, if you want to make very high-quality games, the cost will be higher and higher, this trend will not stop, people will always demand higher quality. But at the same time, this could slow down the game's growth and innovation. And, for creative work, people need to communicate face-to-face. In my opinion, the pandemic could lead to a 30% reduction in the efficiency of many game developments, which is a problem.

GamesBeat: How do you talk to the developer team and get them to successfully make better games for Tencent? It sounds like you may have to speak up more than usual.

Orion: The best way is always to encourage those game producers, we'll support their studios to make great games, and we also have a lot of resources.

But I think the key to communicating with the studio is the balance in game development. Teams need to be eager to make a successful game, and if they believe in their direction, their gameplay, their ideas, their concepts, that's where a successful game starts. We're looking for teams and studios that believe in their ideas.

At the same time, we will try to help them with our resources. Sometimes there is a certain gap between the ideas and visions of the production team and their capabilities, and we can help them improve. We have a central technical team, a lot of resources, different studios around the world, to help each other and know what we can do. We also look at the market very closely and go deep into the community. As a game company, Tencent believes in the power of community drive. We listen to players and help studios and development teams learn more about what they should do.

The best way to balance game development 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, and that's what we're trying to convey to the developers. At the same time, we're also inspiring studios to follow some of our ideas, because we believe that core gameplay is the key to the market. We encourage all studios, all of our developers, to explore new hits in the genre, like League of Legends in MOBA or PUBG and Fortnite in Tactical Athletics.

As we've said before, players want more and more beautiful games, which increases costs. We believe that the game-as-a-service model is a good answer in the market. While we're still in the early stages and there are still problems with some of the games that apply this model, we believe this is the future of the market. Part of the reason we believe in this model is also that we believe in community-driven forces. We want all developers to be able to communicate with and listen to their voices.

Finally, emerging markets are still on the rise, but players' tastes are similar to those of mature markets. We believe that high-quality games for the mass market are the key to global success. We will always try to use our resources to support developers in making high-quality games for the mass market.

GamesBeat: What's the most interesting game market trend for you right now?

Orion: I was talking about emerging markets. We look back at 2000, there were probably 100 million gamers in the world, and when we talk about it in 2019, that number becomes 1.8 billion. Today, I think that number should be close to 2.5 billion. This is a huge leap forward for the entire industry, and it also means a change in the general trend of the market.

Also, as I said before, the barriers between platforms are bridging. In 2016, 2017, and 2018, mobile platforms and hosting platforms were two completely different worlds, with huge differences between manufacturers and users. But now we see that these two markets are increasingly converging.

GamesBeat: Square Enix sold its game studios in the West and said it would focus on blockchain games, NFTs and more. How do you see investment areas such as NFTs and blockchain?

Orion: This question is broader. We think new technology is a very important thing, but for me, the most important thing in the gaming industry is gameplay, then narrative, then technology.

Gameplay is the key to having fun in the game. Narrative and storytelling are the right context for the game, allowing people to believe in the game and have more immersion. Of course, technology is also a change in the rules of the industry, but we only see such a change every decade or two, and perhaps a huge technological change.

The last one we see is the arrival of mobile platforms, smartphones, and before that was 3D graphics. We're looking for new game-changing technologies, but it's too early for something like NFT to see what they can really change.

The way new technologies have a significant impact on the industry is often to bring new gameplay. 3D graphics have had a big impact on the industry as they bring new categories and gameplay, such as first-person shooters. For today's NFTs, I don't see their impact on gameplay and gaming experience.

But on the other hand, I'm more bullish on VR and AR, which is an interesting area. We've invested some resources in these areas to help developers innovate.

Now, there are also some very exciting technologies in the XR space, such as being able to track player movements, gestures and eyes, such as transparent solutions that allow people to interact with the environment while playing games, VR headsets that will become smaller and lighter, and we're also seeing 4K OLED displays make a real leap in experience. These new technologies could transform industries in the next three to five years. We think we should be prepared for this, both on the platform side and in terms of content, which is an interesting and exciting area for the gaming industry.

GamesBeat: In my opinion, the metaverse may be a bigger trend than NFT. Not only will it change the game, the way we play the game, it may also change the platform, what do you think about the metaverse?

Orion: That's why I love the gaming industry. If we look at the history of technology, often games are the industry that pushes technology to the extreme, and it is also aimed at the mass market, going to millions or billions of players, which accelerates the development of technology. For metaversals, the next generation of the Internet experience, gaming will be an important part of driving the industry forward.

GamesBeat: Do you think gamers are changing as well because they want to create their own games? The rise of things like Roblox and Minecraft seems to suggest that this is a trend that needs attention on a global scale.

Orion: This is an interesting trend. We also believe this is an area with great potential in the gaming industry. With NFTs, people always say they'll decentralize control and management, but I'm more confident that it will spread the power to the player.

We can look at what's happening in the engine industry, like Unreal Engine, where only professionals who have been practicing for years can use them skillfully. But now, more technology is being distributed to independent developers. Now even three to five people can develop complete games with really high-quality graphics and gameplay, which was hard to imagine before.

More and more technology is being combined with new platforms to decentralize functionality and development tools to players who, with those capabilities, will create things themselves, which is why player creation is an important part of many game genres.

Recently, I had a meeting with Tim Sweeney to talk about metaversities. The question is, what's new in the metaverse? I would say that the same is playing games and watching movies, the difference is that these activities will take place in the metaverse. We'll spend more time trying to do something different from reality in the metaverse, which is very different from current online games.

But the idea of a metacosm is not new. Back in 1997, the first online game I played, Ultima Online, had a persistently separate world that was almost like a metaverse. But the technology wasn't ready at the time, and now, the technical bottleneck may soon be broken, which is why we can talk about the metaverse again today.

GamesBeat: The metaverse technology I'm looking forward to is being able to jump from one world to another in real time without having to wait or download another game. Do you think this experience is far away, or is it coming?

Orion: It could be here soon, and cloud gaming can definitely achieve that. If you put everything in the cloud, users can quickly jump from one game to another, although everything still looks incredible.

However, at present, there are still some problems with cloud gaming. If you want to guarantee a high-quality experience for players, the cost is still very high, and we don't have the right business model to sustain that experience right now.

Second, the new technology should have native gameplay built around the technology that takes advantage of all the advantages of the technology. But now, what we're talking about in cloud games is usually just streaming current PC, console, and mobile games. It's something you can do with it right now, but it's not the best scenario, we need cloud-native gameplay.

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

Orion: Internally, we talked about ideas like how to define games. Now, games are something we play on a PC, console, or mobile device. But that's not the essence of games, which are products that use information technology to create cultural entertainment. Ever since electronics entered mass life 100 years ago, this product has been being born, including movies, television, radios, and so on. We believe that new technologies lead to continuous innovation.

As I said, games are often the first mass-market application of new technologies. When I was chatting with people who work in the VR industry now and asked them what stage of development we were in now, they compared it to the Atari 2600, which was one of the first computing devices to enter the mass market, and it was four or five years before the IBM PC entered the market.

Even today, if you look at all kinds of new technologies, whether it's metaversms, clouds, or VR, everything happens first in the gaming industry. It will only spread to other industries if the game's mass-oriented business model matures, the cost of the technology decreases, and people learn how to build new applications. Games became the main driver of technology.

Some special companies, such as NVIDIA, are very important to today's AI industry, and AI is now important for all walks of life. Nvidia's starting point is games, and they make graphics cards for games to improve graphics processing, which is a good example.

GamesBeat: I've seen gamers react negatively to some of the big deals that have happened in the industry, like Microsoft's acquisition of Activision Blizzard, or Sony's acquisition of Bungie, and a lot of times, they're worried about the changes that those deals will lead to. Is there any way you can assure them that these changes are good for the player?

Orion: One thing gamers should understand is that the root cause of this acquisition is that development costs are getting bigger. Activision may be a special case, but a lot of studios are acquired because they want to make bigger games, more innovative games, higher quality games, and the development cost can be hundreds of millions of dollars. Small studios can't afford this risk, they need the support of big companies, big platforms, and that's why these deals happen. I think the conclusion is clear, we're going to get more high-quality games, which is good news for gamers.

Games are still an innovative industry, a creative industry. For Tencent, we were fortunate to be able to seize the opportunity, we grabbed "League of Legends" and "PUBG", they all started from a very small team. Developed by developers from DayZ and H1Z1, PUBG is a very small project made by a small team. We will see more and more such opportunities in the future. As I said, technology is becoming more and more fragmented, reaching smaller teams and more people. In the future, indie developers will be more active in the industry.

Of course, we are also seeing a trend of large companies creating more action in the market. At the same time, due to the advent of platforms such as YouTube, Twitch, and Discord, we are seeing players increasingly reaching out to developers, who can communicate directly with players. The gaming community has never been stronger than it is today, and I often say to our development team, listen to the community and use every possible channel to communicate with the community. Now, players have more influence on the industry and developers than ever before.

GamesBeat: It feels like Tencent's strategy in the game has always been ambitious, but it's also encouraging creativity as much as possible.

Orion: Yes, creativity is always something we focus on. We're always looking for the next hit in the gameplay and genre, and we're always working to create new experiences that are the only way to make our gaming business successful.