Tencent Holdings is negotiating exits from several game studio investments in Japan, including Tokyo-traded Marvelous, as part of a reassessment of the company’s global portfolio, according to sources with knowledge of the matter. The Chinese game-publishing giant is evaluating its minority holdings in many studios and in some cases is preparing to sell stakes back to the original management team, even if it means incurring a loss. Tencent is navigating a prolonged slump for the games industry while playing catchup in the capital-intensive artificial intelligence race against peers Alibaba and ByteDance. Among the criteria for Tencent to exit an investment, the company considers whether its envisioned synergies with a portfolio company may have lapsed. Marvelous highlighted a flurry of deals that Tencent struck in Japan around 2020; it is now on the chopping block along with other names in the country that Shenzhen-based Tencent sees as underperforming. Tencent’s bets on marquee studios like closely held PlatinumGames and Elden Ring maker FromSoftware and its parent Kadokawa remain unaffected. Tencent said, “Video games are core to Tencent’s business. We remain fully committed to working with our investees and maintaining our strong presence in the Japanese game market over the long term.” A Marvelous spokesperson declined to comment.