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SHANGHAI: Chinese tech titan Tencent (pic) is set to invest $1.25 billion in French video game maker Ubisoft, in exchange for a 25 per cent stake in a new subsidiary of the “Assassin’s Creed” publisher.

Here are the key things to know about Tencent:

Tech empire

The firm dominates daily life in China with its “super-app” WeChat, which combines chat and social functions with a digital wallet.

 The company has a large presence in video gaming, domestic cloud services and content streaming, with its popular game “Honor of Kings” boasting more than 100 million players.

 Strict restrictions on gaming for children in China have hit the company’s profitability in recent years, but earnings surged in the last quarter of 2024 on the back of the global artificial intelligence frenzy.

 The firm said last month it had started trialling its own AI model, after Chinese upstart DeepSeek’s shock release of its advanced R1 chatbot.

International reach

Tencent has expanded its international video games footprint, first acquiring a majority stake in US-based “League of Legends” publisher Riot Games in 2011.

 It bought out “Clash of Clans” developer Supercell in 2016.

 Thursday’s deal sees Tencent tighten its grip on Ubisoft after climbing aboard in 2022.

 The Chinese firm currently holds almost 10 percent of the group’s stock – a threshold it is not allowed to cross before 2030 -- while the founding Guillemot family owns around 15 per cent.

 Tencent’s latest investment will see it control 25 per cent of a new Ubisoft unit centred on top franchises “Assassin’s Creed”, “Far Cry” and “Tom Clancy’s Rainbow Six”.

US scrutiny

Tencent’s products have faced scrutiny from governments including the United States, where it is seen as a potential threat to national security.

 President Donald Trump sought to ban WeChat and fellow Chinese social app TikTok from the US market during his first term from 2017 to 2021 -- a move that former president Joe Biden revoked soon after coming to power.

 In January, the US Defense Department added Tencent to a list of companies it says are affiliated with Beijing’s military.

 The company called the decision a “mistake”, and said it would “undertake legal proceedings” if necessary to remove itself from the list.

Domestic crackdown

Tencent was among the tech firms caught up in a sweeping domestic crackdown that began in 2020 with officials calling off the massive planned listing of Alibaba-linked fintech company Ant Group.

Chinese authorities stopped approving new video game licences for Tencent for 18 months starting in mid-2021, and the company was hit with a $415 million fine in 2023 for rule violations.

Beijing has signalled renewed friendliness toward tech firms in recent months, but broad restrictions on video game access for minors still stand.