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Team Kaiju Closure By Tencent Reveals Disturbing Trend In The Gaming Industry

Team Kaiju Closure By Tencent Reveals Disturbing Trend In The Gaming Industry

Tencent has shuttered U.S. video game studio Team Kaiju which was considered an important part of the Shenzhen-based company’s global expansion plan. Although Tencent pulled the plug on Team Kaiju in June, the news only surfaced this month. Until its closure, Team Kaiju was the North American subsidiary of the TiMi Studio Group.

Team Kaiju Closure By Tencent Reveals Disturbing Trend In The Gaming Industry
Rosi Zagortcheva and Scott Warner

A source familiar with the matter who spoke to Reuters on the condition of anonymity said some of the staff of the studio have been reassigned to work on another game under Tencent. However, it seems some employees were also let go—although no official statement or number was provided.

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Tencent has always strived to be a competitive video game maker for the Western market and Team Kaiju was instrumental in actualizing that goal. Team Kaiju was working on a big-budget multiplayer game before it was closed. At the time of writing this post, the studio’s website, returned a 404 error.

Tencent brought in Scott Warner (former Halo 4 design director) and Rosi Zagortcheva (Battlefield lead). Following the closure, the game they were working on was canceled. Warner and Zagortcheva have since moved to other projects according to their LinkedIn profiles.

“As part of this decision, we’ve moved many of our teammates to other projects within Tencent and TiMi and said goodbye to a few talented teammates,” s TiMi representative told “TiMi remains committed to making games for global audiences and will continue to hire and work on our other game projects in North America. We thank every member of Team Kaiju for their effort, passion, and professionalism.”

Team Kaiju’s closure has thrown up questions

Team Kaiju Closure By Tencent Reveals Disturbing Trend In The Gaming Industry

The reason for shutting down Team Kaiju remains unclear. Also, the exact time of the closure remains fuzzy. Just soon after the closure of Team Kaiju surfaced, Tencent filed a trademark application for Team Jade in Europe. Many are speculating that Tencent may be shifting its game development strategy or simply moving away from North America.

Scanning through TiMi’s website, I stumbled on the information that said it was “Originally founded as Jade Studio in Shenzhen and debuted on the Chinese PC Gaming Market with QQ Speed (Speed Drifters), which went on to be China’s most successful racing game”.

Team Kaiju’s closure is not disturbing because of the layoffs that came with it. Several Embracer-owned studios including Volition Game, Campfire Cabal, and Free Radical Designs have all met the same fate. However, Team Kaiju’s closure is disturbing in that it allegedly happened in June but only surfaced a few days ago—a long six months of silence.

It goes a long way to show how video game workers are often gagged from speaking out, even when they are being treated unjustly. A long six months of silence shows how much Tencent must have put in to keep the news from spilling out. How many people were let go, what was the size of their severance package, how many were reassigned, and how many resigned, are some of the questions swirling around my head.

Team Kaiju’s closure is coming on the heels of a reassessment of live service games

Team Kaiju Closure By Tencent Reveals Disturbing Trend In The Gaming Industry

It was alleged that the game that Team Kaiju was working on before the shutdown was a live-service AAA game. There appears to be a mass exodus from live service game development. Several studios have terminated the live service games they were making.

A few months ago, Sega announced the cancelation of the Hyenas project which was being developed by Creative Assembly. A few days ago, Naughty Dog dropped the shocker that they were canceling The Last of Us Online.

Sony, Sega, and Tencent, as well as other companies, are reviewing projects. Interestingly, this is not happening because the game market is shrinking. On the contrary, the industry recorded a significant boost this year.

“The Western game industry is having a bumper crop year due to delayed games during the pandemic hitting in 2023,” said Rafael Brown, Microsoft Regional Director and CEO of Symbol Zero. “Most large companies in games are doing well. But money is tighter, moving money around, borrowing money is harder due to interest rates and the economy. Larger investors are scaling back. Moving tens of millions from China to the USA to pay for game dev is never easy.”

Brown said the budget for AAA live service games is usually upward of $100 million. Furthermore, about 50-100% of the development cost is required for marketing. Due to the reasons Brown listed above, companies are becoming risk-averse and are willing to pull the plug mid-development and slash teams and projects to cut their losses.

Tencent is most famous for making PUBG Mobile. Earlier this month at The Game Awards, the company unveiled Last Sentinel, an ambitious title that was developed for consoles by a team of about 200 people at its Lightspeed LA game studio.