Gaming companies linked to Chinese tech firm Tencent Holdings have come under fire from the Trump Administration as part of its crackdown on Beijing.
The CFIUS (Committee on Foreign Investment in the U.S.), which is chaired by the Treasury Department, has sent out letters to Fortnite developer Epic Games, Riot Games of League of Legends fame, and a slew of other game companies seeking details about their security protocols in regards to handling personal data of Americans, Bloomberg reported.
Touted as the world’s largest company, Tencent shelled out a whopping $400 million in 2011 for a 93 percent stake Los Angeles-based Riot Games and fully acquired the company in 2015. Moreover, it made a $330 million investment for a 40 percent stake in Epic Games in 2012.
Aside from that, it owns roughly about a 5 percent stake in Santa Monica, California-based developer of the Call of Duty franchise, Activision Blizzard. Tencent boasts over 300 investments in its portfolio, according to PC Gamer.
In its second-quarter earnings report, the company’s revenue from the online game in domestic, as well as overseas markets increased by a noteworthy 40 percent in the second quarter to 38,288,000 renminbi (about $5.6 million). Total smartphone games revenues for the quarter were 35,988,000 renminbi, which converts roughly to $5.3 million, and PC client games revenues were 10,912,000 renminbi, or about $1.6 million.
This crackdown on game developers associated with Chinese firm comes in the wake of another battle against Tencent over its WeChat app. The Trump administration has also targeted ByteDance, attempting to sell off the assets of the social media video platform TikTok to a US-based company.
A potential deal for a TikTok sale has been reached with compute software company Oracle and is currently awaiting the federal government’s approval. Tencent’s American depositary receipts dropped 2.4 percent to $66.66 at the end of Sept. 17’s trading session.