Recent executive orders issued by the President of the United States has led to pressure being placed on the Chinese company, Tencent. Tencent owns a 40% stake in Epic Games, the creators of Fortnite, which has many worried about whether or not the Tencent ban will affect Fortnite.
Who really owns Fortnite?
The problem with creating policy against working with Tencent is that Tencent is the owner, in whole or in part, of many games. Tencent’s investment strategy currently makes it the largest video game company in the world. Therefore, the action taken against Tencent is having wide reaching consequences as American companies now have to seek other investors, or get sold off wholesale.
Fortnite may actually be in a fortunate position, as Tencent only owns 40% of the Fortnite developers, Epic Games. As a result, Fortnite may be able to skate by with little undue attention. Other companies, such as Riot (League of Legends, Valorant), which are 100% owned by Tencent, will likely come under greater scrutiny.
Epic receives letter from the US government
So far, Bloomberg has already reported that Epic Games has received a letter from the Committee on Foreign Investment in the U.S.. According to the report, Epic Games and other American companies with investment from Tencent, have been “asked about their security protocols in handling Americans’ personal data.”
President Trump’s actions against the Chinese company have nothing to do with Fortnite, however, and even if the US Government finds something actionable in their inquiries, Fortnite will almost certainly be safe. The likely outcome is that Tencent will be ordered to sell their stakes in American companies, something that could see Epic seeking other investment in the near future.
However, while this outcome is more likely, it is not certain. There is a possibility that, if Trump can extend the government’s powers to have greater control over American companies, and if Tencent refuses to back down, that the US government could block all business tied to Tencent from happening within the country.
That is, however, a lot of “ifs”, and for now there isn’t too much to worry about.Published 23 Sep 2020, 02:40 IST