- White House officials assess whether Tencent’s gaming stakes pose national security risks.
- The CFIUS investigation examines potential access to sensitive data of American players.
Tencent’s huge role in the global gaming industry is once again being questioned in the United States. Reports suggest that officials in the White House are discussing whether the Chinese tech giant should continue holding major stakes in American and international game companies.
According to a report from the Financial Times, senior officials in the White House have been holding internal discussions to assess whether Tencent’s investments could pose security risks. Something to note is that this has popped up ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping expected in April this year.
The review stems from a long-running investigation by the Committee on Foreign Investment in the United States (CFIUS), which began during the Biden administration. The investigation looked into whether Tencent’s stakes in game companies could provide access to large volumes of player data from American users.
Because of this wide reach, some officials reportedly believe Tencent’s position in the industry could potentially become a “significant intelligence collection source.” At the time of writing, no public evidence has been presented showing misuse of player data, and no final decision has been made.
However, it’ll be a different story if the US indeed goes ahead with the proposed plan as we read it.
Tencent’s reach in gaming runs deep, and you simply can’t push aside a major player
Even if you are just slightly familiar with the gaming industry, you already know how the story is with Tencent, it’s presence in gaming is massive. It fully owns Riot Games, the American studio behind League of Legends. It also holds a large stake in Epic Games, another US company behind Fortnite and Unreal Engine.
In the mobile gaming space alone, Tencent acquired Finnish developer Supercell in 2016 for around $8.6 billion and has a 81.4% majority stake currently. Beyond that, it has investments in companies like Ubisoft, Remedy Entertainment, Paradox Interactive, Techland, and Krafton.
The influence goes beyond direct investments as well. For example, it has a strategic partnership with Roblox and owns a minority stake in the joint venture that operates a localized version of Roblox in China. There, Roblox Corporation keeps majority control with a 51% stake, but that’s a different story.
Simply stating, Tencent is one of the biggest companies investing money into game studios around the world, with a strong acquisition strategy. If the U.S. government forces it to sell its shares in certain companies, the way many studios get funding could change.
This majorly hurts the smaller teams more that depend on foreign investors to get their games made. This could mean fewer chances for indie developers to secure early funding. Bigger publishers might gain even more control, while smaller studios could struggle to find support.
At the same time, companies like Apple and Google earn a large portion of their app store revenue from games, and many of those games are backed by Tencent. So any major change involving Tencent could also affect the wider mobile gaming market, which is definitely not a good sign.
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