“Every few years, we review our contracts with them. “But their approach was not aligned with our commitment to players, employees and operating principles.”
In an email, Ybarra wrote that the company will stop new sales in China in the next few days and will inform Chinese gamers about next steps. Still, his local releases of “World of Warcraft: Dragonflight,” “Hearthstone: March of the Lich King,” and Season 2 of “Overwatch 2,” content scheduled for this year, will not be affected, the email said. .
“Hearthstone”, “Heroes of the Storm” and “Diablo III” will also be discontinued in China. The only title not affected was the mobile and PC title Diablo Immortal, which was covered by a separate contract.
Ybarra also wrote that esports partnerships and programs in China would be affected. The license agreement between Blizzard and NetEase will end on his January 23, 2023.
NetEase sent an email to the media Wednesday night informing them that there were “significant differences in key terms” and that the parties were unable to reach an agreement. The press release noted that licensed Blizzard Games “represented him in the low single digits as a percentage of NetEase’s total revenue and net income in the first nine months of 2021 and 2022.”
Hong Kong’s NetEase shares fell 15% on the news.
Simon Zhu, Head of Partnerships, NetEase wrote in a post on LinkedIn Thursday that “what happened behind the scenes one day” [sic] It gives developers and gamers a whole new level of understanding of how much damage Jerks can do. A 10,000-hour gamer, he said he was “heartbroken” at the prospect of losing access to the game next year.
China is an important market for Blizzard.The company Submissions to the Securities and Exchange Commission On Thursday, NetEase announced that expiring contracts will account for about 3% of Activision Blizzard’s net revenue in 2021. Considering that Activision generated about $8.8 billion in net revenue last year, this brings him to $264 million.
The PC title “World of Warcraft” became popular in the mid-to-late 2000s, when China’s 15-year console ban was still in effect. In recent years, Chinese video game companies have come under pressure from strict laws governing what kinds of new games they can approve for release. Tencent, a prominent Chinese multimedia conglomerate, reported its first revenue drop in August, dropping 3% to a total of $19.78 billion, with gaming revenue down 1% from his.
Activision Blizzard is set to be acquired by Microsoft for approximately $69 billion by June 2023, pending regulatory review.
This is a developing story and will be updated.
