“A silent effort for global dominance in the gaming market,” described the activities of Tencent by the analytical company Niko Partners. The Chinese giant has already joined more than six hundred companies around the world, but has not interfered with the operation of most of them. No name changes, it was just investing in promising projects.
This is one of the reasons why Tencent’s activities do not attract as much attention as Huawei, which has become a symbol of competition between the West and China. Tencent could easily enter this year only sixteen European companies.
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For the most part, they are renowned game studios, such as originally Czech Bohemia Ineractive or the Finnish Supercell, which created the world-famous mobile game Clash Of Clans. Tencent has paid a total of 21 billion euros for its shares in the seven European gaming studios it has entered so far this year. Until the beginning of this year, he invested “only” in thirteen European companies.
“The reason why Tencent’s approach is not so carefully monitored is that the security risks arising from its activities are not as obvious as in other segments of the industry,” he told the website. Politico Jan Weidenfeld from the Mercator Institute for Chinese Studies. “The gaming industry is also not sufficiently appreciated by Western governments in many cases,” he added.
In total, Tencent has invested in 34 foreign companies this year. In the same period in 2020 and 2019, there were four and three investments, respectively. However, the shift of attention to foreign markets is not accidental, in China the Tencent authorities are tightening the screws, especially in the gaming business, where the company is most active. This was also reflected in the value of the company’s shares, which they only depreciated this year 16 percent, although the declining trend has reversed in the last month.
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Tencent’s activities in the United States have also found their way into the authorities. Last year, while in the days of Donald Trump, the Committee on Foreign Investment in the United States began investigating how the development studios Riot Games and Epic Games, in which Tencent has a stake, treat Americans’ personal data. The extension of activities to European soil was then offered as an acceptable starting point.
“Tencent aims to have half the players outside of China, but in 2020 only 21 percent of its revenue came from other countries,” said Niko Partners. Through investments and acquisitions, Tencent can extend its reach to players outside China and insure itself if the authorities continue to campaign against the gaming industry.
Tencent was founded in 1998 and during its operation has expanded its activities into several segments, from the dominant gaming industry through advertising portals and social networks to the e-commerce segment or investments in the Tesla car plant. Tencent earned $ 20 billion last year and is the world’s fifth most valuable brand, according to research firm Kantar.
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