Blizzard Entertainment to Suspend Game Access for NetEase
January 19, 2023
Activision Blizzard’s Blizzard Entertainment has hit an impasse with licensee NetEase and will as of next week be suspending “most Blizzard game services in mainland China due to the expiration” of current agreements. The arrangement encompasses popular titles such as “World of Warcraft,” “Hearthstone” and “Diablo III.” Blizzard has worked with Chinese video game publisher NetEase since 2008. “The two parties have not reached a deal to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees,” Blizzard said in a statement.
“We will suspend new sales in the coming days and Chinese players will be receiving details of how this will work soon,” according to the announcement, noting that previously scheduled 2023 releases for “World of Warcraft: Dragonflight,” “March of the Lich King” and season 2 of “Overwatch 2” will continue as planned. Ongoing development and publishing of “Diablo Immortal” is “covered under a separate agreement” and excepted from suspension.
So while the companies will continue to be entwined — offering an opportunity to repair a relationship that apparently broke down after protracted negotiations — The Wall Street Journal writes of a deepening “rift between the firms over operations in the world’s biggest mobile game market.”
According to WSJ, “NetEase said Blizzard’s proposal and Tuesday’s statement were ‘impudent, unseemly and commercially illogical.’” Blizzard says it tried for a six-month extension as discussions for new terms continued. NetEase balked, holding out for what it said were “typically” three-year deals while accusing Blizzard of using it as a stalking horse to hook a better deal.
Blizzard is indeed said to be in discussions with other potential China video game partners, though the timeline on which such talks were initiated remains unspecified. “Blizzard said in November it would end its 14-year partnership with NetEase — sending shockwaves across the industry as the partnership was widely seen as one of the most lucrative in video games,” Reuters writes.
Blizzard says it will “launch a tool Wednesday for players of ‘World of Warcraft’ in China to download their progress for future use,” while NetEase “discouraged players from using the tool in a message posted on WeChat, another Chinese social media site, saying ‘there may be unknown security risks,’” according to WSJ, which says the split involves “control of intellectual properties and player data,” which could suggest privacy concerns.
The announcement comes at a sensitive time for Activision Blizzard, which is under scrutiny from the Federal Trade Commission, which in December sued to block Microsoft’s proposed acquisition of the game giant, and may feel a halo effect from lawmaker concerns regarding data storage by another firm with Chinese ownership, TikTok.
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