Tencent, the world’s largest gaming company, is expanding its efforts to support early-stage developers through its Venture Lab initiative.
The business unit helps new studios launch their first game by providing investment, publishing and marketing support, consulting, access to technology, business planning and budgeting, and much more.
The team is led by Juno Shin, who has been working in business development and investment at Tencent for 12 years. Shin has been assembling a team of industry experts, of which there are now about 20 working at Venture Lab, to help scale up the operation's services.
Venture Lab has already provided support for Last Epoch from remote indie studio Eleventh Hour Games and Enshrouded from German developer Keen, which recently surpassed three million players seven months after launch.
With these projects thriving, Shin says Gaming Industry.biz that “now is the right time to make (Venture Lab) more official and a more public offering that we can be proud of.”
It's critical that you have the opportunity to use your team's expertise to help early-stage studios avoid the pitfalls that many startups fall into.
“After working with hundreds of studios, you sometimes enjoy the success and, unfortunately, more often you share the pain of failure, but that's the nature of the business, isn't it?” he tells us when we meet at Gamescom in Cologne.
“There are a lot of common mistakes that studios make, especially early-stage studios, because no one is born a CEO. These people are naturally optimistic, positive-minded creators, but they're not necessarily highly experienced managers or know how to open a bank account, manage payroll and technology, or how to talk to publishers and platforms.
“Our job is really to help reduce the risks of making the same mistakes and show how to maximize the success rate in your first game.”
Venture Lab is the latest initiative Tencent has invested in that aims to help third-party developers, following the launch of its Level Infinite publishing label a few years ago.
Shin notes that since every business grows step by step, Venture Lab focuses on those crucial first steps.
“The success rate[for debut games]is not high, but that's why we take pride in helping developers cross the chasm from zero to one,” he explains. “After that, once you achieve success, it's time to scale from one to ten, from one to 100.
“Within Tencent Games, there's Level Infinite, which helps bigger budget games get published and grow at scale. This is how we work together within the Tencent Games ecosystem.”
Tencent is the largest and one of the highest-grossing companies in the gaming industry, not only thanks to its internally developed titles, such as the hit mobile game Honor of Kings, but also through its ownership of Sumo Group, Funcom, and League of Legends studio Riot Games, as well as varying stakes in Techland, Yager, Supercell, Miniclip, Epic Games, Don't Nod, From Software, Krafton, Ubisoft, Frontier Developments, Paradox Interactive, Roblox, and Platinum Games (to name just a few).
Given the size of the company’s gaming operations, we wonder if Tencent has a responsibility to support early-stage and independent studios to help foster a healthier global gaming ecosystem. Shin notes that while Tencent is in a position to help the industry at large, it ultimately profits from these efforts.
“We’re not a philanthropic company, right?” he laughs. “We do it for a reason. All the innovations come from small studios or from creating new things. Rust, No Man’s Sky, etc. All the studios[behind those games]are small, maybe 13 or 14 people. But they’re the ones really trying to innovate in a new genre of game because they have nothing to lose and they have nothing in the first place.”
“So how do you maximize creative freedom? The only way to do that is to start a new studio, a new project, and take maximum risk. Because otherwise, if you become a big company like Tencent, you have to worry about profitability and sustainability.
“Many of the big successes we're enjoying now started at very small studios. Riot Games, for example, but also Enshrouded, Last Epoch, and Black Myth: Wukong. We believe that betting on studios at their early stages and helping them succeed is in our best interest, so that we can co-create these successes together and enjoy not only the creative advancement, but the financial advancement as well.
“We do it with our own interests in mind at the same time, so we win, but they win, and consumers win because there's new innovation in games from a new studio, rather than sequel after sequel.”