Blizzard Entertainment Is Shutting Down Its Game Services In China

Blizzard Entertainment — home to some of the most iconic game franchises on the planet — will no longer continue to offer the majority of its game services in China. First reported by Business Wire, the company has announced today that the decision comes following the licensing agreement expiration with NetEase.

NetEase—the Chinese internet giant—is one of the largest companies in mainland China, known for bringing some of the best Blizzard games to Chinese gamers. The establishment even has its own studio called NetEase Games which develops in-house titles for players across the world. 

The Rundown:

• Blizzard Entertainment and NetEase will soon terminate their 14-year-long partnership, leaving China without access to some of Blizzard’s most noteworthy titles. 
• Licensing agreements between the two companies are coming to a close on January 23, 2023. Up until now, Blizzard and NetEase have not reached a mutual conclusion in terms of the license renewal that works for both companies. 
• Blizzard has brought its game franchises to China for about 20 years or so in partnership with NetEase and other partners.  

Video game series and titles such as Diablo Immortal, World of Warcraft, Hearthstone, Overwatch, StarCraft, Diablo III, Heroes of the Storm, Warcraft III: Reforged, and others won’t continue to be operable in China, following the license expiration date. 

Blizzard says, 

We will suspend new sales in the coming days and Chinese players will be receiving details of how this will work soon. Upcoming releases for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and season 2 of Overwatch 2 will proceed later this year.” 

In addition, the company president, Mike Ybarra, has stated, 

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.”

A response to the whole situation has also been issued by NetEase. The following translated statement has been taken from the Chinese publication CLS. 

[NetEase] has been doing its best to negotiate with Activision Blizzard, hoping to promote the renewal of the contract. After a long period of negotiations, we still could not reach agreement with Activision Blizzard on some key terms of cooperation. We regret that Activision Blizzard today announced that it will cease cooperation, and we will have to accept this decision. NetEase will continue to fulfill its responsibilities and serve the players until the last moment.”

As for Diablo Immortal, which was a co-developed project of Blizzard and NetEase, there’s a separate agreement that covers the publishing of the free-to-play MMORPG. Therefore, Immortal won’t be discontinued in mainland China just yet. 

According to Reuters, the price of NetEase’s Nasdaq-listed shares has dropped to about $71 as compared to their peak of $132 in February 2021.

Moreover, Daiwa Capital Markets from the UK reported that after Blizzard’s back-out from China, NetEase’s yearly revenue has a risk of dropping by 6-8% starting from next year.

This deduction has come to light after considering that Blizzard constitutes about 60-80% of NetEase’s licensed games and that these games form about 10% of NetEase’s gross revenue. 

What do you think about this major shock for Chinese players? Do let us know in the comments section ahead.