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Blizzard Entertainment has announced that it will be suspending game services in China starting early next year. The licensing deals with Chinese game publisher NetEase expire on January 23, 2023, and according to Blizzard, it is not going to renew the agreement. The two companies last refreshed in 2019.
Blizzard says of its negotiations with NetEase: “The two parties have not reached a deal to extend the agreements consistent with Blizzard’s operating principles and commitments to players and employees.” It has not given any further details, however That reports Bloomberg ownership of player data and intellectual property was one of the sticking points. Since the last extension, there has also been tension between Blizzard and the Chinese authorities.
As of January, Blizzard will discontinue services for World of Warcraft, Warcraft III, Hearthstone, Overwatch 2, Starcraft, Heroes of the Storm, and Diablo III. The two companies teamed up in 2008 to release certain games in China, including the aforementioned titles. It also participated in the development of Diablo Immortal, which will not be affected as it is under a separate agreement. Blizzard will stop sales in China in the coming days.
Blizzard president Mike Ybarra expressed Blizzard’s appreciation to the Chinese public, saying that the company is “looking for alternatives to bring our games back to players in the future.” According to a recent report from Newzoo, the Chinese market is no longer growing at the pace it once was, thanks in part to tighter playtime rules and new releases.
NetEase also posted its own update.
As of January 23, NetEase acknowledged that its license to publish Blizzard titles in China is expiring. In its time publishing Blizzard games over the years, NetEase has grown to become one of China’s leading providers of internet and online gaming services, ranked the No. 5 largest game company in the world according to market researcher Newzoo. Activision Blizzard, which owns Blizzard, is number 9 on the list. “We have made great efforts and tried with utmost sincerity to negotiate with Activision Blizzard so that we can continue our partnership and the many dedicated players in China,” William Ding, CEO of NetEase, said in a statement. “However, there were material differences of opinion on key points and we were unable to reach an agreement. We are committed to our product and operational standards and to our commitments to Chinese players.” Ding added: that time. We will continue our promise to serve our players well until the last minute. We will ensure that our players’ data and assets are properly protected in all of our games.” In its latest earnings announcement, Activision Blizzard also noted that there was a risk that the agreement would not be renewed. of these licensed Blizzard games represent a low single digit percentage of NetEase’s total net income and net income in 2021 and the first nine months of 2022. The expiration of such licenses will not materially affect NetEase’s financial results , the company said. And it said the co-development and publishing of Diablo Immortal is covered by a separate long-term agreement and will continue.
Dean Takahashi contributed to this report.
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