Blizzard ends 14-year licensing take care of NetEase in China • TechCrunch


In a somewhat surprising turn, Blizzard Activision, the California-based gaming publisher behind global hits like World of Warcraft and Overwatch, shall be suspending most of its games in China on account of the expiration of licensing agreements with NetEase, the second-largest gaming company within the country.

Blizzard’s announcement is about to finish a 14-year licensing partnership between the 2 gaming giants. All told, Blizzard has been providing gaming services in China through various partners, including Electronic Arts-backed The9, for 20 years.

From January 2023, most of Blizzard’s titles will stop operating in China. That features the likes of World of Warcraft, Warcraft III: Reforged, Overwatch, the StarCraft series, and Diablo III. Diablo Immortal co-development and publishing is roofed under a separate agreement between the 2 firms, Blizzard said. This might mean the sport will likely proceed its service in China.

The businesses each released their very own response explaining how they reached the tip of the wedding.

”The 2 parties haven’t reached a deal to renew the agreements that’s consistent with Blizzard’s operating principles and commitments to players and employees, and the agreements are set to run out in January 2023,” said Blizzard.

The choice got here at a time when a silver lining appears in China’s gaming industry, which has been hit with heavy-handed regulations over the previous couple of years. China’s state media outlet People’s Day by day published an op-ed this week titled “the chance within the gaming industry can’t be missed,” sending Chinese game stocks surging.

But Blizzard isn’t giving up on China and is open to finding alternative publishing partners, that are required for foreign games that serve the market. “We’re immensely grateful for the fervour our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” said Mike Ybarra, president of Blizzard Entertainment. “Their enthusiasm and creativity encourage us, and we’re on the lookout for alternatives to bring our games back to players in the longer term.”

Even when Blizzard manages to land a latest partner, the strategy of reapplying for regulatory permits for its franchise of games might be an ordeal. China has significantly slowed down the approval strategy of video games after implementing a spate of strict regulations on the sector.

The termination of the partnership seems to have a limited impact on NetEase’s bottom line. The firm said in an announcement that “the web revenues and net income contribution from these licensed Blizzard games represented low single digits as a percentage of NetEase’s total net revenues and net income in 2021 and in the primary nine months of 2022.”

Still, NetEase’s shares plunged 11% on the news Thursday afternoon in Hong Kong.

Interestingly, NetEase also had this to say: “We hold high regard in our product and operational standards and abide by our commitments to Chinese players.”

Is NetEase hinting at its dissatisfaction with how Blizzard operates in China? In any case, the divorce doesn’t sound like an amicable one. Indeed, Simon Zhu, president of worldwide investment and partnership at NetEase Games, posted a bitter message on LinkedIn:

“As a gamer who spent ten thousand hours on this planet of Azeroth, starcraft and overwatch, I feel so heartbroken as I is not going to longer have the access to my account and memories next yr. At some point, when what has happened behind the scene might be told, developers and gamers could have an entire latest level understanding of how much damage a jerk could make. Feel terrible for players who lived in those worlds.”

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