Tencent Is Reportedly In Talks With CFIUS to Maintain Stakes in Epic Games and Riot Games

May 6, 2021 0:29 pm

Reuters reported that Tencent is negotiating agreements with the Committee on Foreign Investment in the United States (CFIUS) that would allow it to keep its ownership stakes in Riot Games and Epic Games, two US-based video game companies behind the massively popular games League of Legends and Fortnite, respectively. Epic Games is also the maker of Unreal Engine, an industry-standard 3D environment development tool that is widely adopted by gaming, television and film industries.

The CFIUS is an inter-agency committee of the United States Government that reviews the national security implications of foreign investments in U.S. companies or operations. Particularly, it has the can review foreign investments like Tencent's, and has the authority to order Chinese companies to comply with its findings and divest from US companies.

According to the Reuters report, which cited sources familliar witht he matter, the Tencent case revolves around the two US gaming companies' handling of US-based user data, and more specifically, whether Tencent's stakes in them can lead to these data being accessible by the Chinese.

Tencent is one of, or if not the most resourceful gaming company around the world, with stakes in most global gaming giants. It owns about 40% of Epic Games, and completely controls Riot Games since 2015. 

Other Tencent ownership in gaming companies include 80% in Grinding Gear Games, the maker of the very popular new ARPG game Path of Exile; 11.5% in Bluehole, the maker of PUBG; 5% in Ubisoft, master of the open-world genre; 5% in Acitivision Blizzard;  84.3% in Supercell, one of the biggest mobile game developers; an undisclosed percentage in Discord, the designated IM/voice communication tool for gamers worldwide.