Many games may be about to feel the effects.
Many games may be about to feel the effects. Read More Gaming
Many games may experience some changes for US-based players, as the Pentagon labels Chinese-based Tencent as a “Chinese military company.” Tencent is the company behind League of Legends, PUBG, and a long list of other games and game companies. The decision to add Tencent to the list may influence how the company does business in the US, and, by extension, how its games are distributed and played on American land.
The United States Defense Department labeled Tencent Holdings Limited as a “Chinese military business operating in the United States,“ as reported by The New York Times. The company joins a list of 134 names as part of the US government’s annually updated Military Blacklist. Although this doesn’t place any sanctions on the company, it strongly discourages US-based companies from doing business with it. The Blacklist can place a strain on the company and may lead to changes in some popular games.
Tencent Has A Stake In Many Games That Could Be Affected By The Blacklist
A Tencent Spokesperson Says It Would Have “No Impact On Our Business”
Tencent is best known for being the parent company of Riot Games, the company behind the incredibly popular League of Legends. However, the tech giant invests in a long list of other gaming companies, holding anywhere between 5% and 80% of each company. According to PC Gamer, Tencent owns a percentage of Epic Games, Larian Studios, FromSoftware, Krafton, Ubisoft, Activision Blizzard, Remedy, and a growing list of others. If the Chinese-based company remains on the US Military Blacklist, it may affect its relationship with the companies it invests in and potentially impact the games themselves.
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The New York Times reports that a spokesperson for the company responded to the news, saying that it was “clearly a mistake.” In an email statement, the spokesperson writes, “We are not a military company or supplier” and states that being placed on the list would have “no impact on our business.” According to the spokesperson, Tencent will be working hard alongside the Department of Defense to “address any misunderstanding.” It remains to be seen if the Pentagon’s decision ends up having any effect on Tencent or any of the companies it’s involved with.
Our Take: The Ramifications Of Tencent Being Blacklisted May Be Far-Reaching
Tencent Is An Investor In Many Gaming Companies
Although Tencent might not be a household gaming name in the US the way Sony, Nintendo, and Microsoft are, the Shenzhen-based company is one of the world’s largest video game companies. It started with the popular Chinese chat programs WeChat and QQ. However, over the years, the company has quietly invested in a long list of gaming and technology companies. Its portfolio is so robust, in fact, that it’s the 17th most valuable company in the world, worth nearly $474 billion USD, according to Companies Market Cap.
Tencent’s involvement in the gaming industry means that if it had to pull out of the Western market even in part, many titles would be affected. Blacklisting the gaming company creates a precedent that may affect other gaming companies in the future. This may be bad news for other video game companies based in China, like HoYoverse (Genshin Impact, Honkai: Star Rail, Zenless Zone Zero) or Game Science (Black Myth: Wukong), which may feel the repercussions in the coming years.
If Tencent’s partnered companies decide to pull out of their relationship, it’s uncertain what this might look like. If the company doesn’t manage to get itself removed from the Blacklist, the future of the many games Tencent invests in may be about to experience an upheaval.
Source: New York Times, Companies Market Cap, PC Gamer
