The Trump administration is debating if it forces the Chinese giant Tencent to get rid of its stakes in the largest Western video game companies. At stake are Riot Games, Epic Games and Supercell (more than a billion players) and the Unreal Engine, used in military simulations. The ghost of TikTok returns, but this time the affected market is different.
Why Tencent. Tencent is not only the largest video game company in the world. It is also the largest silent shareholder in the Western industry: it owns 100% of Riot Games, 28% of Epic Games and majority control of Supercell, the Finnish company behind ‘Clash of Clans’. To this we must add participations in Larian, Remedy, Ubisoft and Discord, among dozens of other studios. For years, that capital has flowed to the West: the studios needed investment, Tencent had liquidity, and no one was looking for trouble.
The White House sniffs. Washington, however, he has had doubts for years. The Committee on Foreign Investment in the United States (CFIUS) began to review these investments during Trump’s first termand the case became one of the longest in the history of the organization, going through two administrations without reaching a clear resolution. What worries the White House is that video game platforms collect financial information, personal data and chat logs from hundreds of millions of users, many of them Americans. These databases are candy for any intelligence agency.
The Epic case. The Unreal Engine adds an extra issue in which the White House has a special interest. The engine not only gives life to video games like ‘Fortnite’; It is also used by defense contractors and the US military itself for military simulation and training. In fact, the country’s Armed Forces have worked directly with Epic for years on that development. That Tencent is a shareholder in the company that builds this technology is what turns this issue into a national security problem. So much so that in January 2025, the Pentagon formally classified Tencent as a company linked to the Chinese military. Tencent rejected that classification, but the Pentagon did not withdraw it.
There are problems. During the Biden administration, the issue was entrenched by an internal disagreement that no one knew how to resolve: Deputy Attorney General Lisa Monaco defended forced disinvestment, but the Treasury Department preferred to keep investments under data segregation protocols. Without consensus, the case was frozen. The cabinet meeting scheduled for March 4 was postponed due to scheduling conflicts. That same day, Tencent shares fell 1.72%.
Parallels with TikTok. There are similaritiesbut also differences. With ByteDance, the US forced the creation of a new entity with 80% in the hands of US investors, as a condition of operating there. But the problem with Tencent is that it does not operate on American soil, but rather is a shareholder in companies already established there. Getting rid of these stakes is not the same as closing an app, it is more a restructuring of private capital. The consequences in the case of Tencent would go beyond Riot and Epic: the Chinese company has been the main injector of capital into studios for a decade, and a forced disinvestment would change the financing conditions of the entire sector, favoring large publishers.
When will there be a solution? The decision has an undeclared but known deadline: Trump travels to China in April to meet with Xi Jinping. Forcing Tencent to sell would send a message of maximum pressure before sitting down to negotiate. In any case, neither the US Treasury, nor Tencent, nor Epic nor Riot have made public statements. Silence, in this type of situation, is louder than if they were discussing it loudly.
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