Industry by Sasha September 22, 2020 981

Overwatch’s parent company being investigated by U.S Government over user data protocols

President Donald Trump has already drawn massive criticism from the mainstream media for wanting to ban the content creation app, TikTok, but now might be setting his sights on games like League of Legends and Fortnite. The news comes after reports that Tencent, which is the parent company of the two games, is currently under investigation over how they handle data security protocols

”Tencent’s U.S. gaming investments, including Riot Games, Epic Games and Activision Blizzard may be at risk of forced divestment like ByteDance’s TikTok with the Committee on Foreign Investment in the U.S. launching an inquiry on national security grounds” Bloomberg insiders claimed in an article “We estimate Tencent’s U.S. assets could be worth at least $22 billion, and account for 6-7% of its sales and profits.”

While the game being outright banned might be a bit of stretch, The President’s recent war on TikTok could spell trouble for anyone that does business with China or overseas. It could also mean that League of legends and Fornite’s parent company are forced to sell their shares of the gaming giants, which might create uncertainty in the market for a period of time.

Furthermore, what will this investigation mean for the company from a business standpoint? Tencent’s stock already plummeted 2.8 percent in Hong Kong earlier this week and knocked their annual gains down to 36%. If nothing else, this investigation could end up damaging the company’s public image in The United States, hurt their earnings for the rest of the year and might even become the next victim of outright politicization.

For example, Donald Trump could start to publicly denounce Fortnite and League of Legends the same way that he already did with Tik Tok earlier this month. While a lot of people on the left will decry the ban or forced sell of assets as authoritarian, The Conservative party will see it as another needed step to protect our country’s national interests. Either way, this is going to polarize the games and lead to a whirlwind of hatred and spiteful love.

Interestingly enough, this isn’t the first time Overwatch and League of Legends future was called into question as just last week The President signed an executive order banning the use of TikTok. While the order didn’t name Tencent directly, it did contain a vague phrase that alluded to the government banning transactions with a company that they have a stake in, wechat.

According to the Executive Order that Trump signed on August 6th in an effort to cut down on Government interference in elections, the ban included” …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.”

In the end, this is truly an unprecedented time in history and one can probably expect more and more popular games or even social media to be in the crosshairs of The United States Government. The President has already made it clear with his ban on downloads of TikTok that he isn’t playing around with China owned companies, and any business with any interest in china need to be very careful about what they do.

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