Trade War reaches the Gaming Industry: US Government to Investigate Companies linked to Tencent

Jeez, talk about the ripples of trade war reaching the gaming industry. The US government has decided to probe Epic Games and Riot Games after banning WeChat and TikTok. Tencent eat your heart out!

The US Treasury Department has sent official notifications to the companies linked with Tencent, a Chinese gaming conglomerate. The official letters directed Epic Games and Riot Games to hand over data related to data security protocols.

Tencent managed to draw the attention of the US government after its recent dealings with the American companies. Mind you that Tencent owns Riot and possess a 40% stake in Epic.

President Trump has decided to play offensive and banned the Chinese apps claiming that it has stolen the personal data of millions of Americans. Following that Mr. President has decided to continue blazing guns and is now heading towards Tencent. This ladies and gentlemen is just a small battle in the ongoing trade war between the USA and China.

So, what are Chinese companies doing to avoid damages, a good question indeed. There is a deal going on to transfer TikTok operations to a US-based company to evade measures taken by the government. Though it provides for a solution it would certainly cause worry for Riot, Epic, and other companies.

An environment of fear and uncertainty is looming in the US gaming industry due to increased scrutiny being faced by companies linked to Chinese investors and businesses. Other companies with links to China-based firms and companies are already prepping PR to lessen potential threats from the US government.

Currently, Tencent, the kingpin in the gaming world, owns several video game companies; chunks of Supercell, Bluehole, Frontier, Marvelous, as well 5% each of Activision Blizzard, Paradox, and Ubisoft. Over the past couple of years, Tencent has also invested in Platinum Games, Grinding Gear, and System Shock franchise.

Let’s hope that these stern actions don’t hurt the interest of gamers and awesome games that are yet to come under the banner of Tencent.

 

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Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. This game podcasts is for the gaming industry.

With over 20+ years of experience, well known publishers, AAA+ game developers, serial gaming entrepreneurs and management teams of gaming corporations consult him on matters that behold financial, technical, operational, strategic and commercial

I am observing and overseeing several boards of gaming companies. My trademark is to listen, strategize and give feedback to the stakeholders involved. I also represent management/founders towards shareholders and vice versa.