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Since 2008, Blizzard’s games have been published in mainland China through licensing agreements with NetEase. Those license agreements will expire on January 23, 2023, and will not be renewed, Blizzard announced. (opens in a new tab). Game services for World of Warcraft, Hearthstone, Overwatch, Diablo 3, the StarCraft series and Heroes of the Storm will end in China on the same date.
“The two parties have not reached an agreement to renew the agreements, which is consistent with Blizzard’s operating principles and commitments to players and employees,” Blizzard’s statement said.
In an announcement sent to us by NetEase, CEO William Ding said, “We have worked hard and tried with our utmost sincerity to negotiate with Activision Blizzard so that we can continue our cooperation and serve the many dedicated players in China. However, there were material differences regarding key terms and we could not reach an agreement. We value our product and operational standards highly and abide by our commitments to Chinese players.”
New sales of Blizzard games in China will be suspended “in the coming days,” and Blizzard says that “Chinese players will receive details on how this will work soon.” However, the planned releases of World of Warcraft’s Dragonflight expansion, Hearthstone’s March of the Lich King set and Overwatch 2 season 2 will still go ahead as planned. Diablo Immortal will also not be affected as it was co-developed by Chinese company Tencent and is covered by a separate licensing agreement.
Recently, the tightening of the Chinese government’s already severe restrictions on the technology industry included an eight-month freeze on video game approvals and new limits on how long under-18s can spend playing online games, leading to the first drop in the sector in users and revenues. in 14 years. Meanwhile, a mobile MMO based on World of Warcraft made by NetEase was canceled after three years of development in August, Bloomberg reported (opens in a new tab) claimed was due to a disagreement over financial terms. After news of that cancellation, we reached out to Blizzard. “We continue to have an extremely successful relationship with NetEase, and it is completely false to suggest that there are any financial disputes,” the company said via email.
Blizzard warned investors about the possibility that its licensing agreements in China will end in its third quarter financial report. (opens in a new tab) back in November, saying, “We are in discussions regarding the renewal of these agreements, but a mutually satisfactory agreement may not be reached.” It also noted that the deals “contributed approximately 3% of Activision Blizzard’s consolidated net revenues in 2021.”
While Activision Blizzard as a whole may not be pushing this too hard, Blizzard’s games and properties have been popular in China. The only reason the Warcraft movie wasn’t a flop was thanks to Chinese audiences in droves, setting a record for the country’s biggest movie premiere of all time. And despite Blizzard’s claim that its business in China did not influence the decision to suspend Hearthstone Grandmaster Chung “blitzchung” Ng Wai after he called for the freedom of Hong Kong in a post-match interview, it’s hard to believe that Hearthstone’s growth in China during US spending has declined (opens in a new tab) was not factored into the otherwise confusing call.
“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,” Blizzard president Mike Ybarra said in the company’s statement. “Their enthusiasm and creativity inspires us, and we are looking for alternatives to bring our games back to players in the future.”
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