Chinese internet giant Tencent reportedly shut down US gaming studio Team Kaiju, representing a blow to the company’s push to establish a competitive international presence in the segment.

A source told Reuters Tencent pulled the plug on Team Kaiju in June this year, with developers told to work under another studio operated by the company. The shutdown has however now become public knowledge after the Chinese company took down Team Kaiju’s official website, as well as removing employees from its LinkedIn page.

There were signs of trouble after the studio’s creative director Scott Warner resigned in April in the middle of developing what was understood to be a big-budget multiplayer game. Its ex-senior director, Rosi Zagorcheva, stepped down in 2022. 

Team Kaiju was reportedly seen as an integral part of Tencent’s expansion plan overseas, and there is growing speculation the shutdown is linked to a broader realignment.

Tencent has published gaming hits including PUBG and League of Legends.

In its Q3 earnings call, the company boasted gains across its units as gaming in its home market returned to growth, reflecting the wider industry trend.

Industry association CGIGC found the segment generated $42.6 billion revenue in 2023, up 13 per cent year-on-year.

However, news of the Team Kaiju shutdown follows a move by rival ByteDance last month to sack 1,000 staff in its main gaming studio and sell off its current portfolio.