Blizzard ends 14-year licensing agreement with NetEase in China

In a somewhat surprising twist, Blizzard Activision, the California-based game publisher behind global hits such as World of Warcraft and Overwatch, will halt most of its games in China due to the expiration of licensing agreements with NetEase, the country’s second-largest gaming company. the country.

Blizzard’s announcement will end the 14-year licensing partnership between the two gaming giants. Overall, Blizzard has been providing game services in China through various partners, including Electronic Arts-backed The9, for 20 years.

Starting in January 2023, most of Blizzard’s titles will stop working in China. This includes games like World of Warcraft, Warcraft III: Reforged, Overwatch, the StarCraft series, and Diablo III.

The joint development and publishing of Diablo Immortal is covered by a separate agreement between the two companies, Blizzard said.

Each company released its own response explaining the end of the marriage.

“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, and the agreements expire in January 2023,” Blizzard said.

The decision comes at a time when silver is emerging in China’s gaming industry, which has been hit by tight regulations over the past few years. China’s state media People’s Daily published a post this week titled “game industry opportunity can’t be missed,” sending China’s gaming stocks soaring.

But Blizzard isn’t giving up on China. “We are extremely grateful for the passion our Chinese community has shown over the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” said Mike Ibarra, president of Blizzard Entertainment.

“Their enthusiasm and creativity inspires us, and we are looking for alternatives to bring our games back to players in the future.”

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

Interestingly, NetEase also said, “We hold our product and operational standards high and honor our commitments to Chinese players.”

Is NetEase hinting at their displeasure with the way Blizzard operates in China? In any case, the divorce doesn’t sound amicable.

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