Tencent, the world’s largest gaming firm, is reportedly winding down its investments in Japanese game studios as it navigates an industry-wide slump and accelerates AI investments to compete with Chinese peers Alibaba and ByteDance. According to a new Bloomberg report, the company is casting a critical eye over its investments and assessing which still hold promise, considering whether envisioned synergies may have lapsed. In 2020, Tencent made a broad push to invest in undervalued creative studios, making minority investments in dozens of organizations including Marvelous, Yager, PlatinumGames, Voodoo, and Wake Up Interactive, and buying several outright such as Leyou Technologies ($1.5 billion), Funcom ($148 million), and Hypixel Studios ($60 million, via Riot Games). Bloomberg reports that Marvelous is among those “on the chopping block” while PlatinumGames and Kadokawa-owned FromSoftware are safe. Despite the audit, the conglomerate has no plans to exit gaming.