US Government Reportedly Concerned About Tencent's Gaming Investments
According to a yet unconfirmed report in the Financial Times, there is debate within the Trump administration whether Chinese publisher Tencent should be allowed to retain its stake in Western gaming companies due to security concerns. This could play into the hands of Saudi Arabia.
The Financial Times (FT) report was picked up by Reuters, among others, which said it had not yet been able to confirm the information. The FT reports, citing people familiar with the matter, that senior members of the Trump administration are debating whether Chinese games publisher Tencent should be allowed to retain its stakes in US and other Western games companies. The reason for this is allegedly security concerns. According to the reports, the debate is being held with a view to the meeting between President Donald Trump and Chinese President Xi Jinping planned for April.
Tencent has stakes in numerous companies, but the main focus is likely to be on Epic Games and Riot Games, the publishers of Fortnite and League of Legends. Epic Games is also the publisher of the Unreal Engine. Tencent's European holdings include Supercell, Funcom and Berlin-based Yager.
The Tencent case is reminiscent of ByteDance. TikTok's parent company was only able to avoid a ban on the platform by selling a majority stake in its US business to a consortium of major investors. The buyers included Oracle, Silver Lake and an investment company from the United Arab Emirates.
An intervention at Tencent could strengthen Saudi Arabia's influence in the gaming world. For several years now, it has been primarily Chinese companies, led by Tencent, as well as the Saudi Arabian PIF and the Savvy Games Group founded and financed by the fund, that have been acquiring shares in companies and entire publishers and studios. Just last September, the PIF, together with Silver Lake and Affinity Partners, whose CEO is Jared Kushner, Donald Trump's son-in-law, acquired Electronic Arts for $55 billion.
The Warner Bros. Discovery case also shows how closely politics and business are currently linked in takeovers and investments in the US. President Donald Trump intervened verbally and expressed concerns about a planned takeover by Netflix. Paramount later intervened in the negotiations with a hostile takeover bid, prompting Netflix to ultimately withdraw. Following its acquisition by Skydance Media Paramount is owned by film producer David Ellison, son of Oracle founder Larry Ellison, who is a friend and supporter of Donald Trump and thanks due to security concerns a major shareholder of TikTok in the US.
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