The cubicle of Blizzard Entertainment at the Chinajoy Expo in Shanghai, China, onAug 2, 2019.
CFOTO|Future Publishing|Getty Images
Activision Blizzard and Chinese video gaming company NetEase are ending their 14- year licensing contract, a relocation that will lead to hit video game franchises like World of Warcraft and Overwatch closing down in China.
The offer, which was very first struck back in August 2008, will now end in January 2023 after the 2 companies were not able to settle on renewal terms. World of Warcraft, an enormously multiplayer online video game, is extremely popular in China.
NetEase’s Hong Kong- noted shares plunged 9% Thursday.
In a declaration, NetEase CEO William Ding stated Blizzard and NetEase had “material differences on key terms” in offer settlements.
“We are honored to have had the privilege of serving our gamers over the past 14 years and have shared many precious moments with them during that time,” Ding stated.
“We will continue our promise to serve our players well until the last minute. We will make sure our players’ data and assets are well protected in all of our games.”
It implies Chinese players will no longer have the ability to play titles from smash hit franchises such as World of Warcraft, StarCraft, Hearthstone, Overwatch and Diablo, which U.S. tech giant Microsoft is set to get in a $69 billion offer to purchase Activision Blizzard.
New Blizzard video game sales will be suspended in mainland China “in the coming days,” Blizzard stated. Upcoming launches for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King and season 2 of Overwatch 2 will continue as regular later on this year, it included.
“We’re immensely grateful for the passion our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” stated Blizzard President Mike Ybarra.
“Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.”
NetEase stated net incomes and earnings contribution from the certified Blizzard video games “represented low single digits” as a part of its total sales and revenues in 2021 along with the very first 9 months of this year.
The ending of the plan “will have no material impact on NetEase’s financial results,” the business included.
The publishing of the fiercely prepared for mobile and PC video game Diablo Immortal in China will not be impacted as it is covered by a different contract in between the companies.
The video game’s release had actually been postponed beyond June 23 after concerns with network and efficiency optimizations.
Thursday’s relocation comes at a delicate time for the Chinese video games market which is only simply emerging from a months-long freeze of approvals from regulators. The market has actually dealt with extreme examination as part of a more comprehensive regulative tightening up on China’s domestic innovation business.
— CNBC’s Arjun Kharpal added to this report.
