Tencent has shut down another overseas studio that was once held in high hopes, after five years without producing a single game.
Recently, TiMi Montréal, an overseas studio under Tencent's TiMi Studio Group based in Canada, has officially ceased operations. Several former employees confirmed the news on international social media platforms, with a senior gameplay programmer stating, "Although we saw it coming, the reality is still hard to accept."
Established in 2021, the studio was intended to be a key part of Tencent's strategy for developing AAA games overseas. However, it failed to survive beyond five years. More awkwardly, throughout its entire five-year existence, the studio did not release any independent game titles to the market, nor did it publicly disclose detailed information about any projects in development. This led many gamers, both domestically and internationally, to mock it as "Tencent's most unproductive overseas studio."
The closure of TiMi Montréal is not an isolated incident in Tencent's overseas gaming strategy. Around the same time, Sumo Digital, a UK-based development studio fully acquired by Tencent in 2021 for £919 million (approximately 8.2 billion yuan), officially announced plans for layoffs. Additionally, 10 Chambers, a Swedish independent game studio in which Tencent holds a majority stake, confirmed it would undergo layoffs that will "affect a large number of employees," even impacting several co-founders. Furthermore, industry insiders predict that Tencent's next potential closure could be the Lightspeed LA studio.
The situation of producing "zero games" over five years is highly embarrassing. As the third R&D studio established by TiMi in North America, following those in Los Angeles and Seattle, TiMi Montréal was initially launched with high expectations. It was set up in Montreal, Canada, a hub for gaming talent and home to core R&D teams of major companies like Ubisoft. Tencent's move was interpreted by the industry as a strategic step to "precisely attract AAA talent and quickly enter the North American AAA market." Notably, during its early days, the studio recruited industry veterans, including former Assassin's Creed: Valhalla Creative Director Ashraf Ismail, raising hopes for significant output.
At its inception, the studio's core mission was to "develop large-scale game products with AAA quality, open-world architecture, and cross-platform capabilities," targeting the global high-end gaming market. This aligned closely with Tencent's strategy at the time to "focus on overseas AAA games and create global game IPs." However, this ambitious plan ultimately turned into an unfulfilled vision. From its establishment in 2021 to its closure in 2026, TiMi Montréal did not release any self-developed games and rarely disclosed specific progress on any projects under development. Occasional reports indicated that it had participated in localization support for existing Tencent IPs such as Pokémon Unite and Call of Duty: Mobile, which was inconsistent with its stated goal of "AAA self-development."
This lack of output placed TiMi Montréal under public scrutiny. Overseas gamers joked on social media that "employees at this studio were slacking off every day," while domestic players questioned whether "Tencent's heavy investment in overseas studios was for game development or land acquisition." However, industry analysts suggest that the failure of TiMi Montréal is not simply due to inefficiency but is rather an inevitable outcome of Tencent's "impatient and功利" approach to overseas AAA expansion.
Industry analyst He Beihang commented, "Companies that consistently produce in the North American AAA space usually have over a decade of积累. It's impossible for TiMi Montréal to replicate that with just a few hundred hires." He believes that from the moment TiMi Montréal announced its intention to create a "AAA-level, open-world, service-focused, multi-platform video game," it was clear they were not genuinely committed to game development. Each of these keywords—"AAA-level," "open-world," "service-focused," and "multi-platform"—represents a highly complex undertaking. Combining them meant asking a newly formed overseas team with limited积累 to accomplish what even established studios often struggle with.
More alarmingly, the closure of TiMi Montréal may only be the "prelude" to further contractions among Tencent's overseas studios. Multiple industry insiders indicated that this shutdown could signal Tencent's acceleration of layoffs and closures across its international game development units. For instance, Lightspeed LA, a studio under Tencent's Lightspeed & Quantum Studio Group, has not updated its overseas social media accounts since June 2025. Moreover, all job openings on its official website have been suspended. "A complete halt in recruitment usually indicates unfavorable project progress. Lightspeed LA might be seeking a dignified way to shut down," one insider noted. Tencent has not responded to inquiries regarding this information.
In fact, this is not the first time Tencent's overseas studios have undergone large-scale adjustments. As early as 2023, Team Kaiju, a studio established by Tencent in Los Angeles that recruited former core members from the Halo and Battlefield series and also focused on AAA development, ceased operations due to slow project progress and high costs. In the second half of 2025, Tencent also divested several overseas gaming assets, including the NextBeat team under Supercell and its stake in Eleventh Hour Games, developer of Last Epoch, gradually scaling back its heavy-asset布局 overseas. Additionally, Riot Games, owned by Tencent, announced in early 2026 that it would reduce the size of the development team for the fighting game 2XKO, less than three weeks after the game's official launch, citing "market momentum falling short of expectations and inability to support the current team size."
If the closure of TiMi Montréal is the inevitable outcome for a studio with "zero output," then Tencent's recent series of layoffs overseas exposes the broader challenges in its AAA expansion strategy. Since 2025, Tencent has continuously implemented cuts and adjustments across its overseas studios, from the UK to Sweden, affecting both fully acquired giants and minority-owned independent studios. The heavily invested overseas R&D matrix is now facing unprecedented pressure to contract.
The most notable case is the layoffs at UK-based Sumo Digital. In February 2026, Sumo Digital officially announced large-scale layoffs, though the exact number of affected employees remains undetermined. The studio stated, "Like many other studios, we have to adapt to a persistently unstable environment, adjust our business form to maintain resilience, and prepare for long-term success." Besides Sumo Digital, 10 Chambers, the Swedish independent game studio majority-owned by Tencent, also faced a "large-scale layoff" crisis. In mid-February 2026, 10 Chambers confirmed it would undergo a "significant reorganization," with layoffs "affecting a large number of employees," including several of the studio's co-founders.
Tencent's struggles in overseas AAA expansion are not unique. In recent years, the global gaming industry has entered a period of adjustment, and domestic gaming giants have slowed their overseas expansion步伐. Tencent's contraction is a reflection of broader industry trends. NetEase, Tencent's main competitor, has also encountered setbacks in its overseas布局, shutting down studios and implementing large-scale layoffs, creating an "industry resonance" with Tencent and highlighting the difficulties Chinese giants face in breaking into the AAA market abroad.
Since 2024, NetEase has closed seven overseas studios across North America, Canada, Japan, and other regions. These include Bad Brain Game Studios established in Montreal in 2023, Jackalytic Games in the US, and Jar of Sparks in Seattle. Most of these studios operated for less than three years and failed to release any original titles. For example, when Jackalytic Games was shut down, it also canceled a Warhammer MMO game project that had been in development since May 2022, rendering substantial prior R&D investments futile.
He Beihang analyzed that if a new team truly understood the complexity of a AAA open-world service project, its first reaction should be caution,收敛, and phased verification—not slapping on all high-risk labels at once. When promises far exceed an organization's capabilities, the business world typically presents two possibilities: either the team lacks the ability, leading to an underestimation of difficulty and overestimation of itself, or a grandiose narrative is needed to secure investment.
Industry analyst Zhang Shule stated, "The overseas contraction by Tencent and NetEase本质上 stems from a common misconception among domestic giants: trying to use capital to buy time and talent in overseas AAA布局." He pointed out that the AAA gaming industry in North America and Europe has developed mature R&D systems and talent ecosystems, with leading players often boasting over a decade of technical积累 and project experience. Domestic giants, however, often hope to quickly enter the AAA market by "offering high salaries to poach talent and acquiring studios," overlooking the cyclical and complex nature of AAA development. "The development cycle for AAA games typically spans three to five years or more, requiring sustained capital investment and technical沉淀. Domestic giants are often eager to see results; if project progress falls short of expectations, they tend to cut losses decisively, leading to either mid-project shutdowns or forced layoffs."