Tencent Games is one of the biggest gaming companies in the world. It owns Riot Games and has a significant investment in Epic Games. The Chinese company is in talks with the U.S. government to retain its stakes in the two companies.

The world's largest video games vendor, Tencent Games is in talks with the U.S. government as it seeks to retain its stake in Riot Games and Epic Games according to a Reuters report.

Tencent in talks to retain its Epic and Riot Games Holdings

Chinese company, Tencent Games is one of the biggest gaming companies in the world.
Chinese company, Tencent Games is one of the biggest gaming companies in the world.

The world’s biggest gaming company might be struggling to keep a hold on its investments. A recent Reuters report suggests Tencent Games is negotiating agreements with a U.S. national security panel. 

Tencent has been in talks with the Committee on Foreign Investment in the United States (CFIUS). The CFIUS is looking into whether Epic Games’ and Riot Games’ handling of user data poses a national security risk due to their Chinese ownership. The committee has the authority to order the Chinese technology giant to divest U.S. holdings.

Tencent owns a 40% stake in Epic Games. After buying a majority stake in Riot Games in 2011, the Chinese company bought out the rest of the company in 2015. While there is no clarity on Tencent’s actions to safeguard its investments, typical actions involve independent auditors to monitor the implementation of agreements.

How does this affect Epic Games and Riot Games?

Sources told Reuters that Epic Games does not share user data with Tencent. A Riot Games spokesman said the Los Angeles-based company operates independently of Tencent and that it has implemented "industry-leading practices" to protect player data. He declined to comment on Riot Games' discussions with CFIUS.

The political tension between the U.S. and China has resulted in trade restrictions. It has also led to increased scrutiny and crackdown of Chinese investments in American technology firms.

The Biden administration has not pursued these actions as aggressively as the previous government. The new administration has not forced Bytedance to go through last year’s orders to sell its stake in Tiktok. Neither has the Biden administration withdrawn these orders and things might still move into motion in the future.

League of Legends and Fortnite are two of the most popular video games. A change in ownership could have significant implications for the future of the video game industry and esports. Riot Games also owns Valorant, Teamfight Tactics, Legends of Runeterra and Wild Rift. Meanwhile, Epic Games recently bought Rocket League maker, Psyonix as it looks to solidify its app store. Epic Games is also involved in an ongoing lawsuit against Apple over high platform fees on iOS. 

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