The video game industry received a major scare from the United States government.
American president Donald Trump has been beating a drum in recent weeks in regards to banning popular social media platform TikTok from the United States due to national security concerns. On Thursday, he took action by signing an executive order in an attempt to force TikTok parent company ByteDance into selling the app.
Caught in the crossfire of this is WeChat, another social media app based out of China and owned by Tencent Holdings Ltd., a conglomerate that owns shares in a number of video game publishers. This includes a 40% stake in Fortnite publisher Epic Games and 100% of League of Legends publisher Riot Games.
The strict wording of Trump’s order left League of Legends’ fate uncertain.
“Any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd., Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order,” the order states.
The executive order was worded such that it would have barred American consumers from making purchases from a number of the top video game publishers in the world due to their association with, or ownership by, Tencent. But according to the Los Angeles Times’ Sam Dean, the White House then noted that this is strictly applicable to WeChat. This means that Tencent’s numerous partners in the video game industry will not be affected:
Video game companies owned by Tencent will NOT be affected by this executive order!
White House official confirmed to the LA Times that the EO only blocks transactions related to WeChat
So Riot Games (League of Legends), Epic Games (Fortnite), et al are safe
— Sam Dean 🦅 (@SamAugustDean) August 7, 2020
This undoubtedly led to a sigh of relief at major video games companies as they will not be caught up in the controversy that TikTok is facing.
Tencent’s ownership of Riot Games has caused problems
Donald Trump has had a very public beef with social media platform TikTok, labeling it a cybersecurity concern due to it being owned by a Chinese company. ByteDance hasn’t specifically been accused of proliferating malware, stealing users’ personal information, or spying. However, the company has reportedly worked with the Chinese Communist Party in the past to surveil and censor content regarding human rights abuses in China.
While Tencent Holdings is an enormous conglomerate that has an expansive catalog of products and services in tech and electronics, it is also the single largest video game company in the world. Alongside its complete ownership of Riot Games and large share of Epic Games, Tencent holds smaller minority stakes in Ubisoft, Activision Blizzard, Bluehole, and many more.
As with ByteDance, Tencent hasn’t been directly tied to any major cybersecurity issues, but its willingness to bow to the Chinese government has led to controversy. Last year, the Los Angeles Times issued a scathing report discussing Riot Games developing software for the Chinese government that was used to monitor and document the gaming habits of League of Legends players in China. This was followed by a separate controversy when Riot threatened punishment for any political discussion, which was presumably designed to silence any talk of the protests for democracy that were ongoing in Hong Kong.
Though Riot is unaffected by this executive order, it feels like an inevitability that Tencent’s ownership will continue to cause grief for the people behind League of Legends.