Tencent Responds to U.S. Military Ties Listing Amid Nintendo Switch China Exit

Tencent, China’s multinational gaming conglomerate and the world’s largest video game company, has recently been added by the U.S.

Department of Defense to its list of firms considered to have connections to the Chinese military.

This federal registry, updated in early January 2025, highlights entities deemed potentially problematic for U.S.

interests, although inclusion does not currently involve direct sanctions against the company. According to a Bloomberg report, Tencent’s shares fell by 7% following its formal entry onto the list, marking the company's most significant single-day decline since October 2024.

Despite this setback, Tencent assures stakeholders and partners that the listing is based on what it describes as "a misunderstanding." Speaking with The Verge, Tencent spokesperson Danny Marti explained, “Tencent is not a military company or supplier.

This designation is not comparable to sanctions or export controls, so it does not impact our business operations.

We are committed to cooperating with the Department of Defense to resolve any misunderstandings.” It's important to note that previous additions to the federal blacklist have not always been permanent.

Notably, in 2021, Xiaomi — another major Chinese tech company — was removed from the register a few months after its inclusion, following clarification efforts.

Tencent appears poised to pursue a similar resolution with U.S.

officials. Tencent’s significance within the global gaming ecosystem cannot be overstated.

The company owns or holds substantial stakes in key studios, including Riot Games (League of Legends), Techland (Dying Light), as well as significant interests in Epic Games, FromSoftware, Activision Blizzard, and Ubisoft.

Tencent has also played a pivotal role in the Chinese distribution of the Nintendo Switch, operating the localized Tencent Nintendo Switch platform since its launch in China. In November 2024, Tencent announced a major shift for Switch users in China: all online services for Tencent Nintendo Switch will conclude in 2026.

The company confirmed that eShop purchases in the market will end by March 2026, while code redemptions will cease in May 2026.

This development underscores Tencent’s unique position at the intersection of global gaming, platform distribution, and evolving regulatory landscapes. While the Department of Defense’s list does not restrict current operations, it signals a more cautious environment for U.S.

companies considering partnerships or investments with listed entities.

As Tencent seeks to address its status with American regulators, its future collaborations, particularly within the rapidly changing gaming industry, will be closely watched. For ongoing updates regarding Tencent’s U.S.

regulatory status and its impact on the Nintendo Switch and other international gaming ventures, stay tuned.

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