Who owns Tencent? WeChat, Riot Games and Epic Games, all the apps and gaming companies under its umbrella
Amid the news of the executive order by Trump of banning WeChat, here's a look at the company that owns the app
After President Donald Trump announced that he is going to ban TikTok, there are reports that another chat service will bear his brunt and get axed from the US. According to CNBC, Trump on August 6 issued an executive order banning any US transactions with Chinese tech firms Tencent and ByteDance. Tencent owns the Chinese messaging app WeChat and ByteDance is the Beijing-based parent company of the popular short-video-sharing app TikTok. As per the report, the ban will take effect in 45 days.
In the executive order Trump said, “WeChat automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.” He also added that the application also captures personal information of Chinese nationals visiting the US. The report also states the order would basically ban the app in the United States as it would prohibit “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.”
According to Games Industry.biz, the executive order would be annulled if the companies mentioned are acquired by someone else in the 45-day window. While there were reports that Microsoft has been in talks to acquire TikTok, no such news has been heard about Tencent. The Games Industry.biz states though the order says transactions "related to WeChat," it is possible that it could impact a number of games and game companies that Tencent either owns or holds stakes in, potentially including fully-owned subsidiary Riot Games or companies it owns stakes of varying sizes in, such as Epic Games, Activision Blizzard, Supercell, Grinding Gear Games, Netmarble, Glu Mobile, Kakao, and numerous others.
The company was founded by Pony Ma, Zhang Zhidong, Xu Chenye, Chen Yidan and Zeng Liqing in November 1998 as Tencent Inc. based in the Cayman Islands. Their initial funding was provided to it by venture capitalists and in February 1999, Tencent's messenger product OICQ was released. However, they had to change the name to QQ due to a lawsuit threat from ICQ and its owner AOL, an American owned web portal. South African media company Naspers purchased a share of Tencent in 2001 and Tencent Holding Ltd was listed on the Hong Kong Stock Exchange on June 2004. Initially, their sole mode of income was from advertising and premium users of QQ, who pay monthly fees to receive extras. However, by 2008, Tencent was seeing profit growth from the sale of virtual goods. While Tencent's services have included online gaming since 2004, around 2007-2008 it rapidly increased its offerings by licensing games. Now the company has over 300 investments in its portfolio, according to PCgamer.
In January 2011, Tencent launched Weixin, in China, a social media app, which is now branded as WeChat. The app is one of the world's most powerful social media apps and has over 1 billion monthly active users, according to a 2018 report by Tech Node. On February 2011, Tencent acquired a majority stake in Riot Games, developer of 'League of Legends', and in December 2015, Riot Games sold its remaining equity to Tencent Holdings. The company acquired a minority stake in Epic Games, developer of franchises like 'Fortnite, Unreal, Gears of War and Infinity Blade', in June 2012, as well as a 5 percent stake in Ubisoft.
Tencent Games was then founded in 2003 to focus on online games. It has four internal game development studios: TiMi Studio Group headquartered in Shenzhen; Lightspeed & Quantum Studio Group in Shenzhen; Aurora Studio Group in Shanghai, China; and Morefun Studio Group in Shenzhen. The studios mostly produce browser games and mobile games generally exclusive to the Chinese marketplace. The first game QQ Tang was released in 2004, which is based on its social media platform QQ. In 2015, the company released its multiplayer online battle arena game 'Honor of Kings' exclusively for the Chinese market, and by 2017 was one of the most popular games globally, according to Tech Node. They released an international version of 'Honor of Kings' named 'Arena of Valor' in 2017. In 2019, as reported by Reuters, Tencent teamed up with the Publicity Department of the Communist Party of China and the People's Daily to develop “patriotic games”.
Tencent also has significant stakes in Tesla Inc. and Snap Inc., the maker of Snapchat, and the Chinese company has streaming deals in place with the NBA, the NFL and Major League Baseball. In February 2019, Reddit received a $300 million funding by Tencent.
On November 2017, Tencent formally entered into a strategic co-operation with PUBG corporation and obtained exclusive rights to operate Playerunknown's Battlegrounds in China. The same year, Tencent unveiled its own flagship gaming platform, WeGame which will host games, content, and services from all over the world and will provide gaming info, purchases, downloads, live streaming and community services, creating an open ecosystem for gaming.
On March 2019, the company shared that TiMi Studios would develop Activision Blizzard's Call of Duty: Mobile game, which was eventually released worldwide on October that year. As of October 4, 2019, the game has surpassed 35 million downloads and over $2 million in revenue, according to Digital Trends. According to South China Morning Post, PUBG Mobile and its Chinese version topped global mobile games chart in tems of revenue in March 2020, as many people turned to online entertainment during the Covid-19 pandemic. Recently, during the World Artificial Intelligence Conference (WAIC) in July this year, according to Digital Analytics India, Tencent COO, Ren Yuxin, shared that the company is thinking and exploration in the field of artificial intelligence with development areas.