As the gaming industry debates the impact of AI on game development, NPC interactions, and content creation, Huya’s traditional model of “selling in-game items and managing events” increasingly feels like a relic from a bygone era.

In Guangzhou, during the rainy season of May 2023, Lin Songtao arrived at Huya’s headquarters in Pazhou. Instead of flowers and applause, he was met with a stark financial report: a 487 million yuan loss for 2022, a revenue decline from a peak of 11.35 billion yuan to 9.26 billion yuan, and a noticeable exodus of paying users.

At that moment, Huya stood at a crossroads. Its planned merger with Douyu had been blocked by regulators, short-video platforms were aggressively poaching top streamers, and its reliance on a tipping-based revenue model had reached its limits. Founder Dong Rongjie had just stepped down, and Tencent, now in full control, appointed Vice President Lin Songtao as chairman. Leading a team of capable executives, including Huang Junhong, Lin entered the scene like a “fire brigade” ready to tackle the crisis.

Expectations were high for this “fire chief.” After all, he had been instrumental in the success of QQ Space and had led App Treasure to outperform Baidu in the app distribution market. Within Tencent, Lin was seen as a “star manager” with strong product expertise.

However, few mentioned that, just years before his appointment to Huya, Lin had also led another Tencent venture—Weishi. Positioned as a direct competitor to ByteDance in the short-video space, Weishi ultimately faded into obscurity. It wasn’t until later, with the launch of WeChat’s Video Account feature, that Tencent managed to regain some ground in the short-video arena.

So, when Lin stood in Huya’s conference room and unveiled his ambitious “Three-Year Plan,” few in the audience may have realized that this new leader’s previous “fire-fighting” efforts had not been entirely successful.

02 The Strategy

Lin Songtao’s strategy was clear: since earning money from tips had become challenging, Huya would pivot toward game publishing, item sales, and game advertising. The goal was to transform Huya from a single “live-streaming tipping platform” into a “comprehensive game ecosystem service provider.”

The logic was sound. The core of game live-streaming is traffic, and the ultimate aim of traffic is monetization. When users were no longer willing to spend lavishly on virtual gifts, directing traffic deeper into the game industry chain seemed like the only viable path forward.

Three years have passed. How effective has this strategy been?

Judging by the financial numbers, Lin has achieved some notable KPIs. In 2025, Huya’s revenue reached 6.502 billion yuan, a 7% year-on-year increase, finally halting the continuous decline. Revenue from game-related services, advertising, and other sources reached 1.908 billion yuan, a 43.1% year-on-year increase, with its revenue share rising from less than 10% to nearly 30%. Revenue from item sales more than doubled year-on-year.

At the beginning of 2026, the mobile game “Goose Goose Duck” briefly offered a glimmer of hope for Huya’s transformation. Within 24 hours of its launch, it gained over 5 million new users, and on the second day of its public test, Huya’s stock price surged by 14.5% in a single day. More importantly, this game did not rely on Tencent’s “support” but represented an independent validation of value outside Tencent’s ecosystem.

However, beneath this layer of “growth” lies a hollowed-out shell drained by strategic transformation.

For the entire year of 2025, Huya’s Non-GAAP net profit was only 99.5 million yuan, a staggering 63% year-on-year decline. Even more shocking was that this meager profit was almost entirely supported by “interest income”—191 million yuan in interest income for the year. If interest income is excluded, Huya’s core business remained deeply unprofitable. Its gross margin also shrank from around 20% to 14.1%.

The so-called “structural optimization” resembles nothing more than a financial sleight of hand to satisfy capital narratives.

03 The Talent Drain

The biggest challenge Lin Songtao faces is not the transformation of the business model but the loss of “people.”

As a former QQ product manager, Lin understands that traffic is essentially content, and the core of game live-streaming content is streamers. Yet, when it comes to retaining talent, Lin is powerless. In 2023, Zhang Daxian, the top streamer for “Honor of Kings,” switched to Douyin, while other top streamers like Saonan and Buqiuren also reached collaborations with Douyin. The defection of these top talents drained Huya’s lifeblood and fattened its competitors.

The willingness of high-net-worth “big brother” users to tip heavily depends on the interactive scenarios and emotional value provided by top streamers. When these streamers left, the “big brothers” naturally stopped tipping. From 2022 to 2024, Huya’s paying users dropped from 5.63 million to 4.4 million by the first quarter of 2025. After that, Huya even stopped disclosing this metric.

Mobile monthly active users, which peaked at 85.4 million at the end of 2021, fell to 83.1 million in the first quarter of 2026. In the face of Douyin’s hundreds of millions of daily active users, Huya’s efforts to cultivate a thousand top streamers through the “Huya Billion Plan” seem futile.

People left, and money followed.

If the business decline was a capability issue, then strategic retrenchment and massive dividends were attitude problems. Under Lin’s leadership, Huya made multiple large dividend payouts despite continuous losses: 2.788 billion yuan in cash dividends for the entire year of 2024 and another 2.338 billion yuan in mid-2025. The total annual dividends amounted to 2.1 times the net profit.

Tencent, which holds approximately 67.3% of Huya’s equity, received most of this money. After the dividends, Huya’s cash and cash equivalents plummeted from 6.255 billion yuan to 3.766 billion yuan, evaporating nearly 2.5 billion yuan in a year.

Netizens commented bluntly: “Lin Songtao drained Huya’s cash flow to enrich the major shareholder while taking credit for the transformation. He’s mastered the art of ‘building a decoy path while secretly crossing the river.’”

While these “feeding the master at the expense of the company” arguments are crude, they highlight a critical question: Is Lin Songtao truly serving the market shareholders or the major shareholder, Tencent?

04 The Pawn

The answer is self-evident.

Lin Songtao is first and foremost a soldier of Tencent, secondarily the CEO of Huya. To date, he still serves as Tencent’s Vice President and President of Tencent Online Video. In March 2026, he attended the Tencent Video V-Vision Conference as President of Tencent Online Video, unveiling the new year’s content landscape alongside executives like Sun Zhonghuai.

This dual identity means that every decision he makes is not just an independent judgment as “Huya’s CEO.” The Three-Year Plan was, ultimately, for the major shareholder’s eyes. On Tencent’s chessboard, Lin Songtao is merely a pawn—his value depends on whether he can fulfill a role, not on how dazzling he is.

Judging by the dividend payouts, Lin has indeed “fulfilled his role.” With hard cash in hand, Tencent, as the nearly 70% shareholder, took the lion’s share. From a pure financial return perspective, he delivered a satisfactory report to shareholders.

But if Tencent’s expectation for Lin was to “reverse the decline and make Huya stand tall again,” he has clearly disappointed Tencent.

The live-streaming business has declined for 16 consecutive quarters, with paying users shrinking by over 20%, and the core business continues to bleed. A subsidiary that only transfers cash to its parent company but cannot stand on its own—how much long-term strategic value does it hold for Tencent?

The question is: What does Tencent truly value?

Judging by Lin’s actions over the past three years and Tencent’s response, the answer leans toward the former. Dividends are tangible, while transformation results can wait. As long as dividends keep flowing into Tencent’s pockets, Lin can remain secure in his position.

But Tencent’s patience is not infinite. WeChat’s Video Account is rising, and if it increases its investment in game live-streaming, Huya’s “only child” status within Tencent’s ecosystem will be at risk. At that point, Tencent’s criteria for evaluating Lin will likely go beyond just “delivering dividends.”

05 The Final Countdown

In August 2026, Lin Songtao’s “Three-Year Plan” enters its final countdown.

He has delivered part of the answer: non-live-streaming revenue now accounts for over 30%, “Goose Goose Duck” proved the possibility of independent publishing, and initiatives like AI live-streaming rooms and MCN-ization are attempting to transform Huya from a “traffic transit hub” into a platform capable of sustainably organizing content.

But another part of the answer is glaring: its market capitalization has shrunk by over 95% from its peak, now standing at less than 700 million USD; cash reserves have significantly decreased, and the “fig leaf” of interest income is thinning; the hollowed-out streamer ecosystem is eroding profits, and without Tencent’s in-game item support, the profit report would look even worse.

Huya is becoming the “downstream contractor” of Tencent’s gaming industry chain, responsible for the dirty work but lacking pricing power.

Lin tried to save Huya by “cutting the fat,” eliminating unprofitable businesses, and betting on game services. But without a massive streamer ecosystem and user engagement as a moat, the so-called “game services” are just castles in the air.

For Tencent, Huya has never been a strategic core. It’s just a “small business that was neglected for a while”—too small to warrant significant resource investment but not worth abandoning entirely because game live-streaming remains a part of the gaming industry chain.

So Tencent sent Lin. Not because of his outstanding performance but because he is one of Tencent’s own, obedient, and knows when to pay dividends and when to spin a narrative.

But Tencent is not entirely satisfied with his three-year performance. If it were, the stock price wouldn’t have plummeted after the financial report and remained unrecovered. If it were, he wouldn’t be simultaneously serving as President of Online Video, ready to “retreat” at any moment.

06 The Future

The true endgame may not lie with Huya but with Tencent’s AI-ification of gaming.

As the entire industry debates how AI is reshaping game development, NPC interactions, and content creation, Huya’s traditional model of “selling in-game items and managing events” increasingly feels like a relic from a bygone era. Tencent’s true ambition is to use AI to reconstruct game production methods and user experiences. From AI training in “Honor of Kings” to the application of generative AI in game scenarios, that is the main battleground of a trillion-dollar market.

What about Huya? It may ultimately become a “data pipeline” or “distribution terminal” in Tencent’s gaming AI ecosystem, continuing its role as a “downstream contractor.” And Lin Songtao, the legendary contributor behind QQ Space and App Treasure, the disillusioned leader of Weishi, and the “gravekeeper” of Huya, may be quietly collected like any pawn that has been moved off the board.

Without much dignity or need for elaborate reasons.

The golden age of game live-streaming has been buried by Lin in the “Three-Year Plan’s” grave. And he himself may be waiting for the next reassignment order.