Tencent has more money than God and owns seemingly a piece of every part of video games, but that might not be the case going forward. The conglomerate is reportedly in negotiations with the United States to keep its holdings in United States’ companies, specifically its ownership of Epic Games and Riot Games.
According to Reuters, Tencent is currently talking to the Committee on Foreign Investment in the United States (CFIUS). The committee has the power to force companies to sell their stakes in United States companies on grounds of national security, and given the amount of data that Riot and Epic Games hold about their customers across games like Fortnite, League of Legends and the Epic Games Store, CFIUS is apparently concerned.
The committee has been increasingly moving to lock down the sale or ownership of United States companies and assets by Chinese corporations over the last few years. The most famous intervention was in 2020, when CFIUS conducted a review into ByteDance, the owners of the TikTok video sharing platform. TikTok was formed from the acquisition of Musical.ly, which ByteDance bought for almost $US1 billion back in 2017 without clearance from CFIUS (likely because there was no concern around national security at the time).
The CFIUS intervention last year resulted in TikTok slowly decoupling itself from ByteDance, culminating in a potential sale or spin-off of its American operations. Most of that has stalled in the last few months with the transition of a new US administration, which has not tried to enforce the divestment order from the prior Trump administration. Still, it’s indicative of just how much power the committee and the US can wield when national security rears its head (or is wielded as an excuse).
The Reuters report says the committee is investigating whether a potential security risk exists with Tencent’s ownership of Epic and Riot over the storage and use of personal data. Sources told the newswire that the committee and Tencent is currently working out a potential deal that would allow Tencent to maintain its ownership of both companies, although it’s not known at this stage what that deal would look like.
A statement from Riot to Reuters said the company has “industry leading practices” to protect users’ data.
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