US labels Tencent as a Chinese military company

The US Department of Defense has labelled Chinese megacorp Tencent - a huge player in the global video games industry - as a Chinese military company.

Tencent itself has responded to say the label is inaccurate, and a "misunderstanding".

The listing of Tencent as a Chinese military company does not immediately impact its ability to do business in the US, but raises the risk of complications in the future.

As reported by The Verge, drone company DJI has seen its US imports blocked since it was added to the same list. But other companies, such as Chinese smartphone maker Xiaomi, have been added and then removed.

In 2020, President Trump issued an executive order which stated that US businesses could not invest in Chinese companies linked to the US military. Trump is set to return to power later this month.

"We are not a military company or supplier," Tencent spokesperson Danny Marti said. "Unlike sanctions or export controls, this listing has no impact on our business. We will nonetheless work with the Department of Defense to address any misunderstanding."

Tencent's reach across the global video games industry is enormous. It owns League of Legends developer Riot Games, Dune: Awakening maker Funcom and UK outfit Sumo Digital, in addition to several of its own companies such as Pokémon Unite maker Timi Studios.

In addition, Tencent owns majority stakes in Dying Light developer Techland, Rime studio Tequila Works, plus mobile studios Miniclip and Supercell. Fortnite and Unreal Engine maker Epic Games is 29 percent owned by Tencent, while the company also holds notable stakes in FromSoftware, Remedy, Krafton, Paradox, Frontier, Kadokawa, Marvelous, Bloober Team and Netmarble.

And then there's Ubisoft - another company in which Tencent holds a stake - which is currently in discussions with the Chinese company over a potential stock buyout, in a bid to stabilise the troubled Assassin's Creed maker.