Blizzard has revealed that they are going to stop doing business in China momentarily as they have ended their contract with their local partner in the country, NetEase.
This immediately affects the titles World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch,the StarCraft series, Diablo III, and Heroes of the Storm. Blizzard and Netease penned an agreement for distribution in China as far back as 2008, and those contracts are ending in January 2023.
This does not affect their contract for Diablo Immortal, which NetEase developed for Blizzard as a global title. Announced in 2018, the title was only very recently published to mobile and Windows, starting at June 2, 2022. We don’t know the details for their contract on this title, but again, this is a completely different deal, for one game to be produced by NetEase and to be published worldwide, instead of Blizzard’s global hits being brought to China.
Blizzard Entertainment president Mike Ybarra shared this statement:
“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. Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.”
We actually reported on Blizzard revealing that this contract was ending, and that they were in the middle of negotiations with NetEase. However, the issues involved are about more than money, at least, the money NetEase would be making.
A year before the NetEase contract, all the way back in 2007, Blizzard was compelled to comply with new China business regulations. Blizzard had to change the drop rates for lootboxes on their team shooter Overwatch. China had undergone an overhaul of how they regulate foreign owned video game businesses as well. Not only Blizzard, but the three big console companies, Electronic Arts, and essentially every big game company had to partner up with a local video game company to continue to do business in their markets.
Of course, the deal for Microsoft to acquire Activision Blizzard is also a potential factor in Blizzard’s decision to hit pause. If the purchase is eventually approved by regulators, it will be favorable for Microsoft to redraw such contracts from scratch on their own terms. On the other hand, revelations that continue to come up in the regulator investigations may also affect the favorability of such deals.
Whatever the case, there are far too many Blizzard fans in China for the company to completely ignore. Their return to China is not a matter of if, but of when.
Source: Business Wire
