Funcom has announced the purchase of 29% of shares from Norwegian KGJ Capital As by Tencent Holdings. The public statement reads:
OSLO, Norway – Sept 30th, 2019 – Tencent, a leading Internet company with a strong online games operation, entered into a share purchase agreement to acquire 29% of the shares in Funcom, the independent developer and publisher of games such as Conan Exiles, The Secret World, and Mutant Year Zero: Road to Eden. The acquisition makes Tencent the largest shareholder in Funcom. Funcom is listed as Funcom SE on the Oslo Stock Exchange (OSE: Funcom).
Tencent has agreed to acquire all shares belonging to the Norway-based KGJ Capital AS, which is currently the largest shareholder in Funcom.
“We are very pleased to see Tencent come in as the largest shareholder of Funcom,” says Funcom CEO Rui Casais. “Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games.The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”
Tencent ranks top in terms of online games revenue globally and is a shareholder in many of the world’s leading gaming companies such as Riot Games, Epic, Supercell, Ubisoft, Paradox, Frontier and Miniclip.
Gamer’s should take concern of the growing network of influence Tencent is acquiring over the industry. Before mentioning their 40% share in Epic Games rendering the Epic Store to be largely the formerly planned Tencent International Store, there is the 5% they own in Activision/Blizzard, Ubisoft and Paradox interactive. 80% of Grinding Gears Games,100% of Riot, 14.46% and 84.3% of Supercell are also owned by Tencent. The company has ties to the Lego Group, Goldman Sachs, owns 12% of Snapchat and has influence in countless other companies.
This monolithic reach inevitably has a negative impact on the economy, and rightfully is illegal in most first world countries because of the monopolistic impacts it tends to have. Yet on the global stage no such preventative measures exist, nor any regulation to keep these corporate entities in check. Already this influence is visible in companies like Ubisoft declaring Valve’s 30% too much, all the while happy to pay Sony, Microsoft, Apple, and Google the same 30% without question. As the influence continues to grow with Tencent becoming more subordinate to the Chinese government it means the Chinese government continues to grow in influence over the video game market.
Detractors of this concern will point out that Tencent is an independent company. On paper this claim has merits, but in practice it is becoming more an illusionary divide between them and the Chinese Government. In 2017 the Chinese government in a move to demonstrate their power over the giant publisher froze all video game approvals. In the Chinese system every game has to be approved by the state for sale. This resulted in 135 Billion dollar loss in the company’s stock value. Routinely the Chinese Government shuts down Tencent’s social media accounts and fines them for not properly policing their communities.
As a result the company has continued to bow to the influence of the Chinese government. In 2018 the company censored human rights activists on WeChat through the censorship of keyword combinations, as reported by Quartz. As a company its independence from the Chinese Authority is increasingly diminishing, to a degree that eventually the independence will be a mere formality on paper and little else.