On Thursday, President Donald Trump signed an executive order with the intention of banning the popular Chinese chat app WeChat. However, the executive assignment also focused on WeChat’s parent company, Tencent, which has made significant inroads into many major video game companies and franchises, including Riot Games and Epic Games, making its future uncertain. However, the White House has since made it clear that it will not target video game companies with ties to Tencent with this order.
The confusion about the president’s executive order – where President Trump also mentions that his executive order bans TikTok – comes in paragraph 1. (a), where the order describes the specific things that may affect it. :
The following actions will be prohibited with effect from 45 days after the date of this order, to the extent permitted under applicable law: any transaction related to WeChat by one person, or in relation to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (aka Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce under Section 1 (c) of this mandate.
It’s easy to see how the language of the order, which directly mentions both Tencent Holdings and its subsidiaries, can raise serious questions about the way video games will fit in here. Tencent represents one of the major investors in the video game industry, both in China and in the rest of the world.
Tencent has a majority stake in companies such as Riot Games, the makers of League of Legends en Valid; Supercell, the developers of Clash of Clans en Clash Royale; Grinding Gear Games, the developers of Path of exile. Tencent also owns one minority interest in companies such as Epic Games, the company behind it Fortnite and the Unreal Engine; Ubisoft; Activision / Blizzard; Bluehole en PlayerUnknown’s Battlegrounds; PlatinumGames. But those are not the only areas in which Tencent is a major player. The Chinese company is also an investor in Discord, Reddit, and even Spotify, which could be affected based on the interpretation of the executive order. Nintendo also partnered with Tencent to bring the Switch to China. Polygon has reached out to Epic Games and Riot Games for comment on the executive order.
According to the LA Times, the White House later stated that “the executive order regarding WeChat only blocks transactions related to WeChat, not those involving other Tencent holdings.” The ban itself will not take effect until 45 days from August 6, at which time the Secretary of State for Commerce will explain exactly what is and is not affected by the executive order.
Even if the ban itself is not directly aimed at companies or affects them, it still has a chance to affect them indirectly. Tencent itself has already felt the effects of order; their stock fell more than 10% in Hong Kong on Friday, after the ban was announced. However, when it became clear that the ban was specific to WeChat, the stock recovered slightly but still ended up around 5%, a loss of about $ 34.6 billion, according to Bloomberg.
