In a report published Monday (1/6/25), the U.S. Department of Defense added gaming goliath Tencent to its list of firms allegedly aiding the Chinese military. Also added to the list are Chinese companies CATL, ChangXin Memory Technologies, Quectel Wireless, and drone maker Autel Robotics.
Chinese companies DJI and Hesai Technologies were both previously added to the same list last year. While they still remain on the list, both companies sued the Pentagon for the U.S. Defense Department’s designation.
“While the designation does not involve immediate bans, it can be a blow to the reputations of affected companies and represents a stark warning to U.S. entities and firms about the risks of conducting business with them,” according to a report from Nikkei Asia.
Both Tencent and catl deny allegations made by the U.S. Department of defense report
Tencent is one of the biggest names in the video game industry. It owns shares in over 600 companies, including some of gaming’s biggest publishers. Epic Games, Larian Studios, FromSoftware, and Ubisoft are just some of the companies partially owned by the Chinese megacorporation. Other studios, like League of Legends‘ makers Riot Games and Path of Exile creators Grinding Gear Games, it owns outright.
This isn’t the first time the U.S. government set its sights on Tencent. Before leaving office in 2020, then-president Donald Trump issued an executive order restricting U.S. companies from investing in entities tied to the Chinese military. This order also resulted in the banning of all transactions from Tencent’s WeChat app.
“We are not a military company or supplier,” a Tencent spokesperson told The Verge. Tencent U.S. market shares fell by 8% to 9.8% following the news from the U.S. Department of Defense. While the designation may not affect the availability of games owned by Tencent being sold in the U.S., it could affect how its companies do business with U.S. consumers. Riot Games and Grinding Gear Games, makers of League of Legends and Path of Exile respectively, operate with a free-to-play business model for their games. With the 2020 executive order banning WeChat transactions, it’s possible that similar restrictions could extend to microtransactions that help fund these games.
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