Gaming giant Blizzard is about to stop operating some of its games in China, leaving players of multiplayer affairs like World of Warcraft fearing for the future of characters in which they have invested many hours of their lives, often in the company of friends they don’t “see” in other “places”.
This story starts in late 2022, when Blizzard warned that its licensing agreement with an outfit called NetEase – which operates its games in China – was due to expire on January 23, 2023. At the time, Blizzard stated it had “not reached a deal to renew the agreements” with NetEase, but noted they’d done business since 2008. Yesterday, Blizzard’s Chinese operation posted a statement telling players that it had been unable to renegotiate its deal with NetEase and was looking for alternate partners. It explained that the Chinese company had not even entertained an extension to current arrangements.
Blizzard’s statement included news that it had created a function that allows gamers to download files that record their progress. Hopefully, they can one day resume playing when (or if) another operator of the popular online games can be found. The gaming biz did not indicate who might take up the role of operating its games in China, or when it will happen. If Microsoft can pull off the acquisition of Activision, Blizzard’s parent company, the software leviathan is a strong candidate for that role. But the prospects of the deal happening in a hurry are not good, thanks to lawsuits and regulatory complications.
NetEase responded to Blizzard with a … erm … blizzard of insults in its own social media post. As reproduced in Chinese media the statement accused Blizzard of negotiating in bad faith, unilaterally implementing the save progress feature in ways that mean NetEase cannot guarantee its security or functionality, and acting against gamers’ interests. NetEase’s post also pointed out that it was not comfortable negotiating with Blizzard while the US-based gaming giant talked to other prospective partners. The tirade includes terms that could constitute a crude sexual insult related to engaging multiple partners at once. The company even used LinkedIn to criticize Blizzard’s actions to an international audience. The Chinese concern flagged [PDF] the end of its partnership with Blizzard in November 2022, when it told shareholders the games it licensed delivered “low single digits as a percentage of NetEase’s total net revenues and net income in 2021 and in the first nine months of 2022.”
It advised investors that ending the license would have “no material impact on NetEase’s financial results.” China is thought to be the largest source of World of Warcraft players, with over three million signed up. If losing those won’t cause NetEase any material financial pain, perhaps Blizzard had the far more favorable end of the licensing deal and the Chinese partner is better off not doing whatever it takes to keep all those gamers online. The deal between Blizzard and NetEase covers World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the StarCraft series, Diablo III, and Heroes of the Storm. The two have a separate deal covering Diablo Immortal, which NetEase will continue to offer in the Middle Kingdom.