PARIS — China is
investing billions in Europe’s video game industry, but analysts have warned
that there could be trouble along the road unless regulators start to take
stricter notice.
اضافة اعلان
Europe is embroiled in long-running disputes with
Beijing over trade, environment, education, raw materials, and intellectual
property — but so far video games are not part of the fight.
As Beijing tightens up on the video game industry at
home, China’s tech giants are looking to make investments overseas — prompting
concerns ranging from data security to limits on creative freedom.
“Europe has this idea that we will be able to
separate strategic industries from non-strategic industries,” Antonia Hmaidi
from the Mercator Institute think-tank told AFP. “Video games for most policymakers
will always go into the non-strategic pile”
This has helped Tencent, the world’s largest games
company by revenue, to buy into studios across Europe — including the then
world-record $8.6 billion deal for Finnish firm Supercell in 2016.
Chinese rival NetEase made its biggest foray into
foreign gaming studios in August, snaffling French firm Quantic Dream, just
days before Tencent upped its stake in Ubisoft, another French studio.
EU regulators only look at major investments with a
pan-European dimension, and national regulators have shown no interest.
When Tencent bought British studio Sumo for $1.3
billion last year, the deal was scrutinized not by UK regulators but by their
US counterparts.
Chinese firms are increasingly seeking profits
abroad, analysts say, because of stifling restrictions in their home market.
Tencent recorded its first-ever quarterly loss in
August on the back of a wide-ranging crackdown on the tech sector.
The Chinese government has identified video games as
a potential threat, not only to state power but also to the wellbeing of
citizens. Beijing introduced a nine-month ban on approval of new video games
last year and now approves only a fraction of the number it once allowed on to
the market.
Game makers have
had to scrub “politically harmful” content, and the state has tightly
restricted the time youngsters can spend gaming.
“Chinese companies in general are looking further
afield given the climate of the domestic market,” said Louise Shorthouse of
Ampere analysis.
Several reports have suggested that Tencent is
preparing to ramp up its overseas investments and could even begin to take
control of smaller firms.
Tencent is essentially “sitting on a load of cash”,
said Kevin Shimota, a former marketing manager at the company and author of
“The First Superapp”. “The Chinese market is cold right now, so in terms of
Tencent’s global strategy you’d expect it to be more aggressive,” he said.
But he stressed that the aim was unlikely to be
direct takeovers or deeper control of foreign companies. Rather, the company
might look at ways of developing games for audiences outside of China.
‘More erratic’
Tencent is ubiquitous in
China: an empire of games, social media, and payment services largely funneled
through its WeChat app, which boasts more than one billion monthly users.
Its leader, Pony Ma, has worked hard to keep himself
out of the limelight — and out of Beijing’s firing line. And the company is
determined to present a humble face to the world.
“Whether we are a minority investor or a majority
shareholder, we do not exercise creative, editorial, management, or day-to-day
control,” Tencent told AFP in a statement.
Tencent’s business model has generally been to buy
into foreign firms and publish their games for the Chinese market. As those
foreign companies were unlikely to find any other way into China, they welcomed
the investment and new revenue streams.
NetEase is following the same model.
A blog from Quantic Dream announcing the takeover
stressed that the French firm would maintain control over the “editorial line,
the artistic direction of our projects, and the management of the studio”.
NetEase did not respond to AFP’s request for
comment.
Analyst Hmaidi said the hands-off approach was fine
when business was booming, but the effects of an economic downturn or political
upheaval were impossible to predict.
European regulators, she suggested, could benefit from a
broader approach that questioned whether a single country — China or any other
nation — should be allowed to dominate an entire industry.
Read more Gaming
Jordan News
.jpg)
.jpg)
