Chapter 14. Tencent, What Is It Trying to Do?

A chapter from ONE MORE WAY: The History Behind Chinese Esports, by BBKinG (Liu Yang). Translated from the Chinese original: 十四 腾讯，他想干嘛？

First published in the author's Zhihu column on December 2, 2013: https://zhuanlan.zhihu.com/p/19628896

This translation was reviewed against the Chinese original on August 1, 2026. If you spot a mistranslation, a wrong name, or a factual error, please open an issue or send a pull request.

Like a lot of people, I do not like Tencent.

My own reason may be a more immediate one. The eighth StarsWar Esports Gala, which our company XMA had planned for the summer of 2013, could not find a date at all, because the schedules of Tencent's TGA and LPL leagues were packed so tightly. The summer holidays are the peak season for events of every kind, and plenty of other organisers running events in the same period were complaining about the same thing.

Look at it from another angle, though. These days even the young man delivering a parcel can chat away for a while when he sees League of Legends on my screen. The choreographer who designs the stage segments for our shows knows who Ruofeng and Caomei are. We go to book a large venue and the manager we meet turns out to be a fan of the WE team.

I am sure many people have run into moments like these. Run into enough of them and you start to realise that the Tencent we do not like has already pulled esports out of the campus culture it used to live in and into a far broader layer of society.

I know that plenty of people still refuse to accept Tencent's games, and refuse to accept the turn towards online games in esports. But if you have lived through the rise and fall of four or five esports titles over the past decade and more, as I have, you will find that the golden age of those games may be long gone while the spirit of esports has carried on, and is in better shape than ever.

Speaking objectively, Chinese esports today is in a better position than at any point in its history. It does not lean on government policy, on the sons of rich men, or on crude marketing. Audiences have matches to watch every day. Game operators earn reputation and money at the same time. Stars and teams have events to play at home and abroad, with prize money of a million yuan or more turning up regularly. Manufacturers of every kind are willing to invest, and even the casters and the media are benefiting. For the first time, the whole chain of the Chinese esports industry is turning in step.

So let us set aside whether we like it or not, and look into the history behind Tencent Games.

By 2005, and arguably earlier, Tencent had begun laying out a strategy in competitive online games. From QQ Speed, which it developed in house, to CrossFire and then League of Legends, it kept spending heavily on esports titles whose ARPU, or average revenue per user, was far lower than that of other online games.

By this point I imagine a lot of readers want to ask:

Tencent, what is it trying to do?

To know what it is trying to do, of course, we first have to know what it has done, so the story has to start at the beginning.

Tencent and esports, the same age but not the same fate

The internet began to spread across China in 1998, and in November of that year the little penguin that is Tencent was born. That same year, a great many players of single-player games went online and set out on the road to real esports. So if I say that Tencent and Chinese esports are about the same age, I wonder whether anyone would disagree.

For the next few years the two were in almost identical positions: fanatical enthusiasts and enormous public attention. Going online back then meant chatting on QQ, and playing games online meant StarCraft and Counter-Strike. Both were about as hot as anything could be. Yet the people at Tencent were as lost as the people in esports. Both groups felt they had landed on something, something big, and neither knew what to do with it.

By 2001, when Tencent had built up 50 million users, the company still had only 18 people. Fortunately Monternet, the mobile billing channel run by China Mobile, appeared at the start of 2001. Tencent used that service to launch basic paid value-added products such as QQ membership, and by the end of 2001 it had positive cash flow.

Chinese esports was reaching a small peak of its own at the same time. At the WCG world finals held in Seoul, South Korea, from December 5 to 9, 2001, MTY and Deep, whose real names are Ma Tianyuan and Wei Qidi, won the world title in StarCraft 2v2.

An aside is needed here. By convention the FIFA events on WCG finals day were played before the StarCraft events, so the Chinese players who took the FIFA 2v2 world title that year, Windboy and Tianqi, whose real names are Lin Xiaogang and Yan Bo, were the first people in Chinese history to win a WCG gold medal. Many people know only about the StarCraft championship, so this is worth mentioning.

At the end of 2001, then, both Tencent and Chinese esports were attracting a great deal of attention. That was also the moment when the distance between them slowly began to open, because their foundations in intellectual property were not the same.

Tencent started with QQ membership, added revenue models such as QQ Show and kept growing as it felt its way forward. By 2003, when its registered users reached 200 million, it launched QQ Games, an in-house casual game community platform. The company had entered a healthy stage of development, and the snowball kept getting bigger.

Chinese esports, having reached the same year of 2003, still had no clear business model. There were plenty of fans in those two years, and the scene had gathered a considerable number of talented idealists with dreams of their own, but that was as far as it went. Esports organisations were reshuffling one after another, Counter-Strike and StarCraft tournaments were growing scarcer, and fans were steadily drifting away to other games and other forms of entertainment.

This is why I now argue against people who are too idealistic. Without a stable and healthy way of paying for itself, the snowball simply stops where it is and gets smaller as time passes.

From 2004 to 2008, Tencent accumulated a great deal of practical experience, in licensed titles and in games it developed itself. In 2008 in particular, after it abandoned traditional RPGs and turned towards segmented casual game markets, the low cost of games as entertainment showed itself to be counter-cyclical, and Tencent grew enormously through the global slump from 2008 to 2010.

Chinese esports, meanwhile, was still sleepwalking. Even with CEG, backed from 2004 by the General Administration of Sport and CITIC Pacific, and even with the effect of events such as Sky's back-to-back WCG world titles in 2005 and 2006, Chinese esports somehow held on to a high level of attention while still failing to find a way of supporting itself.

So when the world financial crisis arrived in 2009, Tencent gradually overtook its peers in online games and settled firmly into first place in the Chinese market, while the esports crowd was scattered. Most of them went into one game company or another and started learning the trade over again.

What follows is the part most people do not know.

In the summer of 2007, a window popped up on QQ advertising jobs in Tencent's interactive entertainment division. In one sense that pop-up marks the starting point of the explosive growth of Tencent Games. Many people saw that advertisement and joined Tencent Games, and quite a few of them had their lives changed by it.

On August 21, 2007, Cross Fire was given its Chinese name, Chuanyue Huoxian. Tencent had by then settled on licensing CrossFire from the South Korean company Smilegate, and Hanyuliang, the well-known esports figure of the StarCraft era whose real name is Chen Yu and who was head of Tencent's Quantum Studio at the time of writing, took part in the licensing work.

A game project at Tencent Games is generally divided into two parts, operations and marketing. Operations of the product sit with the producer, and marketing sits with the marketing department.

Operations for CrossFire were run by the project's producer Wu Yimin, founder of Dawa Digital Technology at the time of writing. He was a man who loved Counter-Strike and played it very well, and he had won Tencent's internal Counter-Strike tournament. The lead designer on CrossFire was Xu Guang, later the game's producer and by the time of writing head of Tencent's FPS projects, who was the one who improved the way the game felt to play. The head of CrossFire tournaments was Liu Haobo.

On the marketing side, the brand managers were Liao Kan, head of FPS marketing at Tencent at the time of writing, and Jin Yibo, by then head of Tencent's TGA and head of marketing for League of Legends. They reported to the marketing director Hou Miao, known as Mars. The whole project team came to a little over ten people, and I regret that the material I could gather was limited, so I cannot name every one of them.

Tencent licensed CrossFire with the original intention of taking over the Counter-Strike market. According to Wu Yimin, the countable figure for Counter-Strike at the time was two to three million players online across the platforms, and that did not include all the players on local network servers. On the face of it, the outlook for FPS games in China at that moment was very promising.

The test build of CrossFire first placed in front of them, however, was dreadful.

The hottest FPS games in South Korea then were Sudden Attack and Special Force, and for various reasons Tencent signed neither. CrossFire in fact came to Tencent bundled with another Korean game, A.V.A, released in Chinese as Zhandi Zhiwang, so expectations had not been high to begin with. The first three rounds of testing and feedback left Wu Yimin and his colleagues thoroughly disheartened. To Counter-Strike players, the graphics and the gameplay of CrossFire were both very poor, and the tests showed that high-level FPS players and beginners alike found it unacceptable.

So the CrossFire project team repositioned the game.

They stopped aiming at the route of winning over Counter-Strike players. Instead they reduced the mechanical complexity and raised the K/D ratio, the ratio of kills to deaths. Put simply, they gave beginners a better chance of killing skilled players, by raising the headshot rate among other things, and they set their marketing target on cultivating new FPS players rather than chasing Counter-Strike users.

For an online game company, the thinking behind esports and the thinking behind online games are not the same.

Esports builds a pyramid, and everyone's eyes are mostly on the top of it. An online game company wants as many people taking part as possible, so its eyes are mostly on the huge population at the base.

The online game approach, therefore, was to raise brand awareness quickly and get more people to hear about CrossFire.

The initial plan was to lift the game's image quickly by borrowing from other brands, which is why CrossFire announced in April 2008 that it was joining WCG as an official event.

The other brand partnership was between CrossFire and Razer.

Many people may not know that Razer was already building high-end gaming mice back in the Quake era of 1999. By 2008 the design of the Razer DeathAdder was strikingly stylish and new, and CrossFire was bundled into the launch of the DeathAdder. One more note: the close relationship that Razer now has with League of Legends and other games rests on the ground laid at that time.

Look more closely at this sequence of moves Tencent made to reposition and promote CrossFire.

Tencent first spotted the positioning problem sharply and lowered the barrier to entry for FPS games without hesitating, then raised the CrossFire brand quickly by tying it to others. During this phase, confidence in CrossFire inside Tencent and expectations of it both began to rise, which hardened the decision to push the product harder and to follow a route that turned quantity into quality.

What comes next is a core part of Tencent's competitive strength in marketing.

Tencent's promoter network

It is worth introducing the ground promotion system that came before it. Ground teams were not unique to Tencent; many game companies had them. The most famous at the time belonged to Giant, the team behind the campaigns for the Naobaijin health supplement and the online game ZT Online. It was a formidable promotional method back then, capable of reaching deep into China's third-tier and fourth-tier cities to promote games in internet cafés and on campuses, but it also required keeping a considerable number of ground staff on the payroll.

That gave ground teams a set of problems from birth. The work is labour intensive, hard to manage and expensive, which meant the model was destined to be phased out. Hardly any company keeps a ground promotion team today.

The work itself still needed doing, and at that point a new idea appeared: the promoter network.

What is a promoter network? The example below makes it clear.

In September 2008, Tencent began running the Hundred Cities League. It picked 20 provinces, three cities in each province and two internet cafés in each city, and at the weekend it ran one match in each of the two cafés. That came to 120 internet cafés, and the cities changed every month.

If Tencent had paid for the whole of that Hundred Cities League itself, the cost alone would have been frightening, to say nothing of the difficulty of executing it. For a newly launched game, doing it that way carried a great deal of risk.

This is where the promoter network came in. The platform resources Tencent had built up over so many years of running QQ were an endless source of supply. It exchanged QQ resources with suppliers in every locality, so a small amount of money for booking machines plus some gift packs was enough to run a synchronised campaign across the country.

This was something other game operators could not copy even when they understood it. In theory, the promotion costs Tencent incurred through this promoter network would always be far lower than those of its competitors, and far quicker to spend.

So Tencent's promoter network grew up alongside the CrossFire tournaments, and it played a considerable part in spreading a new game quickly. The same method was applied to League of Legends from 2010, which is why League of Legends felt as though it had appeared everywhere overnight.

In 2011, CFPL, the televised professional league for CrossFire, opened at GTV in Beijing. Everything from the planning to the details of execution was done with great care, with first-rate presentation of the players and deliberate star-building, so much so that today's LPL still carries a lot of CFPL in it. That pushed the CrossFire brand up another level.

Now for the problems with CrossFire.

Seen from the point of view of an online game, CrossFire was a considerable success, with the highest concurrent player numbers in the world and enormous revenue. In the mainstream esports scene, though, it was not considered a successful esports title.

Why?

First, CrossFire never managed to get into the campus market. It never reached deep into the university students who form the main body of esports, so it was never widely accepted or recognised by them. My own view is that the main reason is the absence of a local network mode. Without a local network, students cannot conveniently organise their own tournaments inside a school, and the game cannot spread by itself around a dormitory. That, of course, is a situation online game companies cannot change at this stage, and campus networks are not going to improve either. CERNET, the education network, holds a position at Chinese universities that carries a special significance and cannot be shaken. That was true ten years ago, it is true now, and it will still be true at least five years from now. The networks at Chinese universities are not going to change beyond recognition either. This is a world inside the system.

Second, once CrossFire had no ability to spread on its own, the promotion work was still not carried out along esports lines or with the structure of an industry in mind. Look at the CrossFire chain: stars, clubs, tournaments, media, operator. Of those five parts only the operator was living comfortably. The other four fell short in both numbers and reputation. In terms of data, even the Taobao shop of the biggest CrossFire star had monthly sales roughly on a par with those of an ordinary Dota or League of Legends caster, which is a great pity.

Compare CrossFire with the titles that history has agreed to call esports, and you find this:

CrossFire met every condition for a breakout, yet in the end it became popular without ever becoming iconic. Its place in history sits one step away from the classic esports titles the public recognises, and it fell short by exactly that small step. Counter-Strike, which made almost no money in China, got in. CrossFire, holder of the title of the most played online game in the world, stopped at the door.

Getting from A to A+ may be the longest distance in the world.

Now for League of Legends.

League of Legends was born lucky. The year it appeared in China, 2010, happened to be the year Dota passed its peak and began to decline, and Tencent, after all the trials and the experience it had accumulated with QQ Speed, DNF and CrossFire, finally met the right game in the right place at the right time and did the right things. Call it fate.

Figures for 2010 put the total number of registered Tencent QQ accounts at close to one billion, with more than 100 million people online at the same time. At the Tencent Games Carnival that year, Tencent Games unveiled a completely new logo and a structure of four sub-brands beneath it: Tencent Games Carnival (TGC), Tencent Games Arena (TGA), Tencent Games Guild (TGG) and Tencent Games Social Responsibility (TGSR).

The way Tencent runs League of Legends now is a combination of the online game approach and the esports approach.

Put simply, the online game side is built wide and the esports side is built high. On one hand they carried on using online game methods such as the promoter network and the Hundred Cities League to spread the game at the base. On the other, they constructed a pyramid of support covering every element of esports.

1. Every club in the League of Legends professional league receives a fixed subsidy of 50,000 yuan every three months plus prize money. Even the worst-performing team gets 50,000 yuan in prize money, and clubs can also take a set percentage of the prize money as a club reward. In other words, as long as a club commits no disciplinary offence over those three months and turns up for its matches on time, any club that has made it into the league can take home at least 100,000 yuan. That is the floor, and the champion's prize is 500,000 yuan.

2. Riot, the developer of League of Legends, pays closer attention to how esports should develop. It has set up League of Legends professional leagues all over the world with broadly similar rules: two match days a week, eight teams, best-of-one games, four round robins over 28 rounds, with the champions of every country and region gathering in the United States for the world finals in September. Winning glory for your country lifts League of Legends to a higher level, and that is one of the great attractions of esports.

3. The casters and the stars of League of Legends are packaged and promoted, given help with their exposure and given the chance to appear on stage, which is rare and valuable.

Tencent has been less satisfactory on the media side, however. Some monopolistic behaviour has provoked resistance from parts of the media, and I will leave it to them to weigh the gains against the losses.

What cannot be denied is that the success of League of Legends has greatly improved the environment in which Chinese esports survives, because this is a genuine virtuous circle, and the snowball is bound to grow bigger and roll faster.

At the same time, Tencent's successful esports operation around League of Legends has given the other online game companies a sense of crisis.

1. Growth in the core online game population has stalled and the numbers keep falling. Over these years a number of short-sighted online games have simply fleeced their players, and once a player who has poured in a great deal of money comes to his senses, he never goes back. That creates a problem: every gold mine is dug out in the end. So the Chinese esports market, with an ARPU that is not high but a scale that is enormous, became the new gold mine in their eyes.

2. Tencent used the fact that League of Legends costs little money and consumes a lot of time to fence off the esports market on one side while squeezing the existing online game market, and above all its competitors' market, on the other. It was a formidable move. It built the habit of playing games at Tencent while weakening its rivals.

So when the other game companies woke up, they rushed to launch esports titles of their own. As I see it, most of them are simply exhausting themselves on defence and have produced no effective way out of the encirclement.

As things stand, Tencent holds every advantage and is calmly moving its forces into position. That is where the intelligence of its strategy lies, and this does not even count the several killer cards Tencent has been holding for some time, which will probably be announced at the end of this year or the beginning of next.

Right. Back to the question at the very start of this chapter.

Tencent, what is it trying to do?

Do.