Tencent In Talks To Keep U.S. Gaming Investments
China’s Tencent Holdings is working to keep its stakes in U.S. Video Game Developers Riot Games and Epic Games amidst security concerns.
Tencent Holdings LTD is negotiating with a US national security panel to retain its ownership stakes in Riot Games and Epic Games, according to Reuters.
For those who haven’t heard of Tencent, they are a Chinese multinational technology conglomerate holding company founded in 1998. Its subsidiaries market a variety of Internet-related services and goods around the world, including entertainment, artificial intelligence, and other tech.
Tencent holds stakes in many companies from around the world including, Riot Games, Funcom, Grinding Gear Games, Epic Games, Activision Blizzard, Paradox interactive, and even Discord. They also held a stake in Glu Mobile before Glu Mobile sold out to Electronic Arts (EA).
The talks have been going on between Tencent holdings and the Committee on Foreign Investment in the United States (CFIUS). Since the second half of last year, the latter has had the power to order the Chinese technology giant to divest its U.S. assets.
According to the reports, CFIUS is investigating whether Epic Games and Riot Games’ handling of their users’ personal data poses a national security risk due to their Chinese ownership.
Tencent holds a 40% stake in Epic Games and they bought a majority share in Riot Games in 2011 and the rest of the company in 2015. These are two of the biggest developers in gaming and the loss of these would mean a loss of an innumerable sum for Tencent.
Last year there were issues when Donald Trump ordered an executive order banning any transactions related to the Chinese-owned TikTok as well as We-Chat which is owned by Tencent. Just because the Trump administration is over doesn’t mean that Biden will necessarily soften on the matter as it pertains to the protection of personal data.
Riot Games has declined to comment on the article, saying that it worked independently of Tencent. Meanwhile, Tencent, Epic Games, and a Treasury Department CFIUS representative all declined to comment.
The sharing of user data is becoming a global problem and one can see why there are such strict measures to keep user’s personal data safe from falling into the wrong hands.
Stay tuned to find out more on this story as we at MGR Gaming keep you informed.