No, Donald Trump is (probably) not trying to shut down League of Legends, CS:GO, and Valorant
It’s only on the rarest of occasions that real-life politics encroach upon the world of ESports. When you consider, though, that some of the most popular games in ESports are owned by a company based in China, it seems inevitable. After all, with an election less than three months away, U.S. President Donald Trump seems to think it behooves him to take a tough-guy stance on China.
On August 9, the Georgia Straight‘s Charlie Smith reported that Trump had issued an executive order “addressing the threat posed by WeChat”. The Chinese conglomerate Tencent Holdings Ltd. owns WeChat.
In the August 6 order, Trump declared:
WeChat, a messaging, social media, and electronic payment application owned by the Chinese company Tencent Holdings Ltd., reportedly has over one billion users worldwide, including users in the United States.
Like TikTok, WeChat automatically captures vast swaths of information from its user. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.
Smith reported on August 9 that the order declares that beginning in 45 days, any transaction with Tencent Holdings or any of its subsidiaries will be prohibited.
Tencent is a major player
Tencent Holdings is a major player in ESports. Here’s what the Straight had to say about the company:
The Shenzhen-based company has a 40 percent stake in Epic Games, creator of Fortnite.
In addition, Tencent Holdings owns Riot Games, which makes League of Legends.
A recent report by TEO PC Games declared that League of Legends is the “most impactful” PC game in the world for the fifth straight quarter.
Riot Games has three others in the top 15—Counter-Strike: Global Offensive (CS:Go), Valorant, and Teamfight Tactics.
According to the Los Angeles Times, Tencent Holdings also owns five percent of video game giants Activision Blizzard and Ubisoft.
Tencent Holdings has a market capitalization of about US$650 billion and it’s listed on the Hong Kong Stock Exchange.
That makes it 10 times larger than Activision Blizzard, Sony, or Nintendo, though it’s still dwarfed by Microsoft.
In March, Tencent Holdings announced that it had purchased a 10 percent stake in Universal Music Group from Vivendi.
As ECentralSports previously reported, Tencent has also entered into a partnership with the government of Hainan to turn that Chinese island province into a global ESports hub.
Game companies not affected?
How will Trump’s executive order affect Tencent’s standing in the ESports world? Not in any direct way, perhaps. As early as August 6—the day Trump issued the order—Los Angeles Times reporter Sam Dean quashed speculation that the order targets Tencent’s video-game companies. In a tweet, Dean cited an unnamed White House official who said that it “only blocks transactions related to WeChat”.
Nonetheless, news of Trump’s executive order sent Tencent Holdings’ market value into a sharp decline. Bloomberg reported that the company’s stock fell 4.8% on Monday. That adds up to a cumulative drop of 9.6%, which translates to a US$66-billion loss of market value.
This drop follows a four-month surge of 70%, which made Tencent Asia’s most valuable company, at nearly US$700 billion.
This article includes reporting by Charlie Smith, the editor of the Georgia Straight newspaper.