Observed Signal · Jul 14, 2026 · Funding · Source: PocketGamer.biz · Impact: 2/5 · Sentiment: Positive
Funding / M&A Market: Transcend Fund's Lirui Ding on Chinese studio funding
Lirui Ding, a principal at Transcend Fund and former member of Activision Blizzard's strategy and M&A team, explains why capital is not scarce in China's games market and describes how funding has shifted in 2026. Backing roughly 40 studios, he looks for genuine differentiation—taste, community, live ops or AI-driven gameplay—that incumbents cannot easily copy. Ding distinguishes 'AI for games' (production/efficiency) from 'AI in games' (novel gameplay experiences) and warns that using generative AI alone is not a durable moat. He says equity rounds are less common, with hybrids (revenue-share, recoupable structures, publishing advances, strategic stakes) and publishing partnerships now prevalent as funding instruments.
Investor perspective on Chinese studio funding trends, hybrid financing instruments, and the strategic role of AI in games informs funding and acquisition approaches but is not industry-shifting.
Key Takeaways & Evidence Grounding
- Lirui Ding is a principal at Transcend Fund and previously worked on strategy and M&A at Activision Blizzard.
- Transcend Fund backs approximately 40 game studios.
- Transcend led AI-led studio welevel's $8.5m Series A about a month before publication.
- Ding argues capital was never the scarce thing in China's games market and that funding is shifting from pure equity to hybrid instruments like revenue-share, recoupable structures, publishing advances, and strategic minority stakes.
- Ding distinguishes between 'AI for games' (production efficiency) and 'AI in games' (AI as material of gameplay that creates novel experiences).
Connected Companies & Entities
2 Entities mappedActivision Blizzard
Gaming publisher with major franchises and in-game advertising inventory.
“As a principal at Transcend Fund, and formerly on the strategy and M&A team at Activision Blizzard, Lirui Ding has spent his career studying...”
PocketGamer.biz
B2B mobile games publisher and industry events operator.
“Ahead of his panel "Under The Microscope: How Are Chinese Studios Being Funded in 2026?" at PGC Summit Shanghai on July 29th, he told Pocket...”
Ontology Mapping & Concepts
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