Video Game Companies are safe from Trump’s Executive Order

President of The United States (POTUS) Donald Trump signed an executive order on Thursday. It prohibits all American entities or individuals from doing business with ByteDance as well as WeChat. ByteDance owns TikTok and WeChat is a messaging and payments app owned by the Chinese tech giant Tencent Holdings Ltd. Trump’s Executive Order will be enforced beginning September 20 due to national security concerns.

Earlier, several media channels anticipated that the executive order can also include video games originating from China as well. But now it is clear that video game companies owned by Tencent will not be affected by this executive order!

The order is set to take effect in 45 days, there is a chance that it will be challenged in court. This comes amid reports that Microsoft is planning to acquire the operations of TikTok in the U.S., Canada, Australia, and New Zealand.

What does the executive order mean?

Trump’s Executive Order deals with a national emergency with respect to information and communications technology. It only blocks transactions related to WeChat and the app’s owners and subsidiaries.

The White House alleged that the Chinese government is monitoring WeChat messages to keep tabs on Chinese nationals in the U.S.

The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: Any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.

Excerpts from Trump’s Executive Order

What all companies are owned or invested by Tencent?

1. Games Developed

  • Arena of Valor and Honor of Kings have been developed by Tencent Games. And it is a 100% subsidiary of Tencent Holdings.
  • League of Legends is developed by Riot Games, is 100% subsidiary of Tencent Holdings.
  • All the games developed by Supercell, Tencent Holdings has 84.3% stake in it.
  • Fortnite is developed by Epic Games and Tencent has a 40% stake in it.
  • PlayerUnknown’s Battlegrounds (PUBG) is developed by Bluehole and Tencent has around 11.5 percent stake in it. Initially, Tencent’s investment in Bluehole was only 1.5 percent. But later, it was increased for an undisclosed amount rumored to be around 10 percent. 
  • Overwatch, StarCraft, Hearthstone, World of Warcraft, and Heroes of the Storm are developed by Activision Blizzard. Tencent has a 5 percent stake in Activision Blizzard.
  • Tom Clancy’s Rainbow Six Siege is developed by Ubisoft and Tencent owns 5 percent of the company.

2. Live streaming Platform investment

Bilibili is China’s equivalent of YouTube and Tencent Holdings is the largest shareholder with 18 percent. Tencent also has a voting power of at least 50.1% in Huya, another game live streaming platform in China.

Douyu, the Twitch like service from China is also controlled by Tencent with a 40.1 percent stake. Recently, Tencent announced the merger of live streaming platforms Douyu and Huya, in order to consolidate its dominance.

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