Trump administration takes aim at Epic, Riot Games over ties to Tencent: report

Makers of "League of Legends" and "Fortnite" are under scrutiny

Gaming companies connected to Chinese technology firm Tencent Holdings are the latest targets caught in the crosshairs by the Trump Administration's crackdown on Beijing.

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According to a report by Bloomberg, The Committee on Foreign Investment in the U.S. (CFIUS), which is chaired by the Treasury Department, has sent letters to Epic Games of "Fortnite" fame and "League of Legends" producer Riot Games and other game companies seeking information about their security protocols in regard to handling Americans’ personal data.

A spokesperson for Epic Games declined to comment. Both Riot Games and CFIUS did not immediately return FOX Business' requests for comment.

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Tencent, the world’s largest gaming company, paid $400 million in 2011 for a 93% stake Los Angeles-based Riot before fully acquiring the company in 2015.  It made a $330 million investment for a 40% stake in Epic Games in 2012. It also owns a roughly 5% stake in Activision Blizzard, the Santa Monica, California-based developer of the "Call of Duty" franchise.

Tencent has more than 300 investments in its portfolio, according to PC Gamer.

In its second-quarter earnings report, Tencent's revenue from online games in both domestic and overseas markets grew by 40% in the second quarter to 38,288,000 renminbi, or $5.6 million. Total smartphone games revenues for the quarter were 35,988,000 renminbi, or $5.3 million, while PC client games revenues were 10,912,000 renminbi, or $1.6 million. 

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The crackdown on game developers tied to the Chinese firm comes amid another battle brewing against Tencent over its WeChat app. The Trump Administration has also targeted ByteDance, aiming to sell off the assets of the popular social media video platform, TikTok, to an American company.

A potential deal for a TikTok sale has been reached with software company Oracle, and is currently awaiting approval from the federal government.

Tencent’s American depositary receipts fell 2.4% to $66.66 at the end of Thursday's trading session.

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