Blizzard to suspend China operation, ending 15-year deal with NetEase

The American video games company had brought popular games like World of Warcraft, Overwatch, DIiablo and Hearthstone to China.

Photo from CFP

Photo from CFP

By PENG Xin, WU Yangyu


Activision Blizzard said it would suspend most game services in the Chinese mainland after its current licensing agreements with NetEase comes to an end on January 23 next year.

The American video games company had worked with the Chinese Internet company for 15 years, bringing popular games like World of Warcraft, Overwatch, Diablo and Hearthstone to China.

Looking for alternatives

Blizzard said it would suspend new sales in the coming days in a statement on its website. Chinese players will receive details of how this will work soon.

“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,” said Mike Ybarra, president of Blizzard Entertainment. “Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.”

In a reply to Jiemian News’ inquiry, NetEase said it had tried its best to negotiate with Blizzard for an extension. But the two eventually failed to reach an agreement.

“Unfortunately, Blizzard had announced the sorry outcome of the negotiation ahead, we will have to accept it,” the company said. “We will continue providing services to our players til the last second.”

Diablo Immortal, a mobile game jointly developed by NetEase and Blizzard, will continue its operation as the two companies signed other agreements on it.

The partnership seems to have become tasteless gum for both sides.

“An important market” for Blizzard, China contributed only 3 percent of the company’s consolidated revenue in Q3.

‘Unrealistically high price

Later on Thursday NetEase released its Q3 financial report. Its revenue grew 10 percent year on year to 24.4 billion yuan (US$3.4 billion), with net profit up 111 percent to 6.7 billion yuan.

According to the report, The revenue and income contribution from Blizzard games represented single-digit percentage of NetEase's total revenues and net income. The expiration of licenses will have no material impact on financial results.

Sources close to Blizzard denied rumors of the American video game company asking “unrealistically high price” for renewing the contract.

NetEase share on HKEX closed 9.05 percent lower at HK$103.5 (94.6 yuan, US$13.22) while shares on NASDAQ dropped 4.32 percent pre-market.