As one of the most aggressive Chinese companies in overseas expansion, Tencent has invested in and acquired numerous game studios abroad in recent years. For instance, Tencent acquired Miniclip, a foreign casual gaming giant, which now oversees 16 studios of various sizes, all focused on developing smaller-scale titles. For AAA games or large-scale service games, Tencent tends to directly lead investments itself, either for intellectual property, production pipelines, or to acquire AAA teams for higher quality.
Of course, Tencent's overseas investments are nothing new. The outcomes are typically either a successful bet that pays off or a project that falters, leading to layoffs—standard news. However, recently, the CEO of a former Tencent-owned overseas studio lamented in an interview: 'Tencent gave us too much money, and they always questioned why we couldn't spend it all. Eventually, the team chose to go solo.'
Joe Brammer, CEO and founder of Bulkhead Studios, mentioned that after being acquired by a Tencent subsidiary in 2022, they proposed a development plan for an FPS PC game called Wardogs. They boldly challenged their career's highest project budget: £10-12 million (approximately RMB 90-110 million). However, Tencent pointed out that the 'scale wasn't big enough' and hoped the studio could make the game larger.
According to Brammer's recollection: 'From 2021 to 2022, they (Tencent) told everyone in the UK that they wouldn't consider any game with a budget under £50 million (approximately RMB 460 million)... But that's not the type of game we wanted to make. That scale was too big for us.' He noted that Tencent sometimes doubted why the studio spent so little on Wardogs. 'We achieved all our goals,' Brammer said. 'Even though we only worked four days a week, we still strived for excellence. However, they were skeptical, saying our deliverables fell short of expectations... because we only spent half of the promised budget. But we refused to waste money on unnecessary things.'
Bulkhead's appeal to Tencent wasn't unfounded; the studio has a rich track record in the FPS genre. In 2019, Bulkhead released the military shooter Battalion 1944, which was a huge success, with Video Game Insights estimating sales of over 580,000 copies. Bulkhead also contributed to PUBG and Team17's Hell Let Loose, and once developed a game for Square Enix, though that project was eventually canceled.
In 2022, Bulkhead was acquired by UK studio Splash Damage, which itself had been acquired by Tencent about two years earlier. Tencent had fully acquired Splash Damage's parent company, Leyou Technologies, for approximately $1.3 billion. (Splash Damage was later acquired by private equity firm Emona Capital last year, with Tencent exiting.)
Brammer described the first year with Tencent as 'like a dream.' He recalled, 'It felt like: "Here's a lot of money, go develop a product, tell us what it is, and who you're selling it to." It was fantastic. That period was when we gained the most.' Similarly, Tencent had high hopes for Bulkhead and Wardogs, which is why they kept Bulkhead when Splash Damage was spun off.
However, a clash of philosophies soon emerged. Tencent, ambitious in the FPS space, clearly wanted to nurture Bulkhead's potential, using Wardogs to target the global top-tier market and seize strategic opportunities. But to Tencent's bemusement, Bulkhead didn't share the grand vision for large-scale projects; they simply wanted to 'retain the player base' pragmatically.
Brammer recalled that Tencent was 'ambitious' and wanted its studios to 'dare to dream.' He acknowledged Tencent's lofty aspirations: 'I think you can only truly understand how big their dreams should be when you see how they solve problems and how much money they invest in doing so.' But Tencent's drive didn't ignite Bulkhead. Brammer and his team, sticking to their creative ideals, found themselves unable to handle the massive budget for larger products and began rethinking 'what success means.'
Brammer said leaving Tencent allowed them to redefine success. 'For us, a game attracting 3,000 players a night and selling hundreds of thousands of copies is success,' he said. 'We don't want to challenge games like Battlefield or become the hottest game on Steam. Our goal is to continuously release new content and build up gradually. We expect player numbers to spike on launch day and then taper off. We see that happening, and we don't hide it.'
This contrasts sharply with Tencent-backed Highguard, which shut down after 45 days. Brammer noted that Bulkhead's philosophy is to consistently release content, grow the player base slowly, and eventually launch as a 'big package' on consoles.
Typically, most overseas teams struggle with funding shortages, making Bulkhead's case—leaving Tencent because they couldn't spend all the money—quite rare in the current market. Tencent's push through financial incentives made Bulkhead uneasy. Brammer described his time at Tencent as 'a fairly formal corporate job.' 'I was forced to attend board meetings and thought, why are we doing this? We never wanted to enter the corporate world... We even considered quitting, starting over from scratch.'
Bulkhead was originally set to close in December last year, but perhaps due to its excellent cost control, requiring only limited additional funds to see a good result, they found a new investor, avoiding dissolution. Bulkhead reached an agreement with Team17's parent company, Everplay, to help the studio spin off into a new holding company, Super Media Group (SMG). Everplay holds a 20% stake in SMG, venture capital firm Hiro Capital holds a minority stake, and nearly half of Bulkhead's employees hold shares.
Another key factor was Bulkhead's team cohesion. Brammer mentioned that when they realized they had to find a buyer or shut down, they took a different approach from other studios—they directly informed employees and updated them weekly. For 12 months, everyone was in the know. Surprisingly, despite the threat of dissolution, no one at Bulkhead posted complaints on LinkedIn or revealed their risk of layoffs. 'They just stuck with it. On the day we signed the deal, we went to the pub, and it was the best day ever,' Brammer reflected.
According to Brammer, Wardogs is expected to launch this year with an Early Access experience. 'This could mean layoffs or bonus schemes. That's the game industry.' But he still wants to reward the team, perhaps by reinstating a four-day workweek or innovating work hours and methods.
Despite the philosophical differences between Bulkhead and Tencent over project positioning, the latest trailer for Wardogs, released in February, shows that the game's quality is quite impressive, though it may not have reached the scale Tencent wanted for 'seizing strategic tipping points.' Based on current information, Wardogs is a full-scale war FPS supporting 100 players. Three teams compete on a 256-square-kilometer map to capture a randomly generated 2x2 km 'control zone.' The team with the most players in the zone earns points, and the first to 100 points wins.
From the video, the game blends tactical gunfights, multi-class combined operations, building and destruction mechanics, and more, offering diverse gameplay. At the start, all players have $10,000 to buy different weapons, equipment, and vehicles. Earning money is flexible—reviving teammates, transporting allies to the control zone, and capturing points all yield cash rewards.
In conclusion, when Chinese companies like Tencent and NetEase are forced to divest overseas teams, it's often blamed on low efficiency or high labor costs. But oddly, Bulkhead managed its finances well and avoided reckless expansion, actively saving money for the boss, yet this led to a split. Of course, encountering a 'highly proactive' acquisition target like Bulkhead was frustrating for Tencent. Rather than persisting with a small-scale product, it was better to let go, allowing both sides to excel in their strengths.
Whether Wardogs, which Bulkhead fought to keep despite leaving Tencent, will meet the studio's expectations of 'attracting 3,000 players and selling hundreds of thousands of copies' after release may become clear within the year. We'll wait and see.