Chinese tech conglomerate Tencent has just been labelled as a “Chinese Military Company” by the United States Department of Defense. A DoD document filed on January 7th, updating the 1260H list, adds Tencent Holdings Limited, along with around 130 other Chinese companies and subsidiaries, with this label.
1260H identifies whether or not Chinese companies are “Military-Civil Fusion contributors operating directly or indirectly in the United States.” Though no further information is provided as to what, specifically, would result in a company receiving the designation. However, Tencent being identified as such means that it is suspected of pushing and/or supporting the People’s Republic of China’s Military-Civil Fusion strategy. As to what the Military-Civil Fusions is, according to the DoD it is described as the following,
“The PRC’s Military-Civil Fusion strategy supports the modernization goals of the People’s Liberation Army (PLA) by ensuring it can acquire advanced technologies and expertise developed by PRC companies, universities, and research programs that appear to be civilian entities.”
As one of the largest companies in China, Tencent has grown and maintained a significant presence in the video game and tech industry. Over the past 15 years, Tencent has acquired developers such as Riot Games, Funcom, and Sharkmob while owning shares or involved with Grinding Gear Games, Supercell, Epic Games, Paradox Interactive, FromSoftware, Larian Studios, Ubisoft, Glu Mobile, Klei Entertainment, Roblox, and Bluehole; even funding Reddit and Discord.
Tencent being labelled as a Chinese Military Company is both highly probable and disconcerting considering the amount of access and influence the company has in western gaming. As pointed out in previous editorials, Tencent’s influence is pervasive enough that it resulted in Activision-Blizzard censoring the free speech of American citizens who supported #FreeHongKong even though, before the World of Warcraft developer was purchased by Microsoft, Tencent only owned 5% of the shares.
In light of this event that, if true, means Tencent is in a perfect position to help the People’s Liberation Army in its goals since Riot Games, which developed League of Legends and Valorant, released an invasive anti-cheat software, named Riot Vanguard, which never turns off and has the same privileges as an admin program that would, allegedly, give Riot Games unfettered access to a person’s computer and everything on it. Riot Games also developed and released the Anti-Addiction System which allows the CCP to track players and kick them from games in China.
We continue to recommend that western gamers refrain from purchasing any and all games created and/or released by Chinese developers and publishers, such as Black Myth: Wukong and Marvel Rivals, for a number of reasons that includes privacy and security. Considering the lengths some Chinese companies go to hide their country of origin, we also continue to recommend that Valve require developers and publishers on Steam to disclose their country of origin and Chinese involvement so that gamers can make well-informed decisions when purchasing a video game.
What the DoD’s designation of Tencent means for the company has yet to be seen, though its stock price declined once it was announced the company was on the list. In the meantime, there are reports that Tencent might be in a position to purchase Ubisoft, either with the help of the Guillemot family or outright in light of the Assassin’s Creed developer’s financial woes and successive flops. More recently, Riot Games updated its Terms of Service to include punishment for off-platform conduct, implying that the developer would be monitoring gamers.
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