Tencent’s TiMi Montreal studio has closed its doors after nearly five years of operation, without ever releasing a game. The closure, first reported by Game File on February 22, 2026, marks another shift in strategy for the Chinese gaming giant as it re-evaluates its investments in North American game development. The news underscores a broader trend of contraction within the gaming industry, particularly impacting studios established during the pandemic-era boom.
The Montreal studio, announced in July 2021, was intended to focus on “AAA open world multi-platform games,” aiming to expand Tencent’s reach beyond its mobile successes like Honor of Kings and Arena of Valor. It joined TiMi Los Angeles and TiMi Seattle as part of the TiMi Studio Group’s North American presence. The company sought to leverage talent from established Western developers to create console-style games, but those ambitions didn’t materialize into a finished product. The shuttering of TiMi Montreal follows a similar fate for TiMi’s L.A.-based studio, Team Kaiju, which closed in 2023, according to GamesIndustry.biz.
A Shift in Strategy for Tencent
The decision to close TiMi Montreal reflects a wider pullback from aggressive expansion in Western markets by Tencent and its competitor, NetEase. Both companies had invested heavily in establishing studios outside of China, hoping to capitalize on the growing demand for console and PC games. However, rising development costs in North America and a changing economic landscape have prompted a reassessment of these strategies. NetEase has reportedly been reducing funding for several of its Western studios over the past two years, as reported by Kotaku.
News of the closure began circulating on LinkedIn late last week, with former employees expressing disappointment and heartbreak. One programmer wrote in a LinkedIn post, shared by Game File, “I am genuinely heartbroken that the public will never get to experience what this team was capable of producing.” The programmer added that the team was comprised of “really talented people” and that working with them was a “privilege.”
Talent Acquisition and Past Controversies
Tencent’s attempt to establish a foothold in Montreal was, in part, driven by the city’s reputation as a hub for open-world game development, home to industry giant Ubisoft. The studio notably hired Ashraf Ismail, the former creative director of Assassin’s Creed Valhalla, in 2022. However, Ismail’s hiring came with baggage, as he had been fired from Ubisoft following allegations concerning his personal conduct, as detailed by Kotaku. His appointment drew scrutiny, but Tencent proceeded with the hire.
Despite attracting experienced talent, TiMi Montreal remained shrouded in secrecy regarding its projects. The studio never publicly announced a game it was developing, nor did it disclose any co-development work on existing titles. This lack of visibility contributed to the sense of uncertainty surrounding the studio’s future, ultimately culminating in its closure.
Industry-Wide Concerns
The closure of TiMi Montreal isn’t an isolated incident. The gaming industry as a whole is facing increased financial pressures, leading to layoffs and studio closures. High development costs, coupled with shifting consumer preferences and economic uncertainty, are forcing companies to produce difficult decisions. The situation highlights the challenges of expanding into new markets and the risks associated with long-term game development projects.
The retreat from North American expansion by Tencent and NetEase signals a potential recalibration of the industry landscape. While both companies remain dominant forces in the global gaming market, their approach to Western development appears to be becoming more cautious and selective. The focus may shift towards leveraging existing studios and partnerships rather than establishing entirely new operations.
Tencent has not commented on the closure of TiMi Montreal when contacted by multiple outlets, including Game File. The company’s silence adds to the sense of finality surrounding the studio’s demise.
The next step for former TiMi Montreal employees will be navigating the job market, a challenge compounded by the broader industry downturn. Industry observers will be watching closely to see how Tencent adjusts its North American strategy in the wake of these closures.
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