Blizzard games will be suspended from sale in China from 23 January 2023, due to an expiring license deal with current publisher, NetEase. On this date, support for all titles will reportedly end, and online servers will also be shut – rendering titles including Overwatch, StarCraft, Diablo 3, Hearthstone, and World of Warcraft unplayable.
China represents a massive market for Blizzard, and for the global games industry. It’s estimated to contribute US $45.44 billion to the market per year, with the country’s interest in mobile games making up 66% of the total global market, according to data analysts at Niko Partners. Microtransactions contribute a major part of this revenue – particularly for free-to-play PC and mobile games, like those offered by Blizzard.
While the company claims the end of its agreement with NetEase will have ‘no material impact’ on future financial results, it’s unclear how this would be possible, given the popularity of Blizzard titles in the region.
As of writing, no future plans for publishing in the region have been announced, although it’s likely Blizzard has a major, replacement deal in the works. China is simply not a market it can afford to lose.
In a statement, the company has claimed it wasn’t able to renew its long-standing deal with NetEase, first established in 2008, due to its inability to create a deal ‘that is consistent with Blizzard’s operating principles and commitments to players and employees.’
‘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,’ Mike Ybarra, president of Blizzard Entertainment said of the decision. ‘Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.’
So far, no alternatives have been announced – a decision that will likely impact swathes of Blizzard games going forward. Diablo Immortal is an exception – this is reportedly covered by a separate deal with NetEase – but there is likely to be a major transition period where Blizzard games are simply not available.
Should this prove to be a significant gap, Blizzard is likely to lose a lot of potential revenue.
According to NetEase, the loss of this deal has also already led to plummeting goodwill. It’s alleged the terms of the deal Blizzard wanted were unfair, and did not protect players.
‘We have put in a great deal of effort and tried with our utmost sincerity to negotiate with Activision Blizzard so that we could continue our collaboration and serve the many dedicated players in China,’ William Ding, CEO of NetEase said of the deal’s collapse.
‘However, there were material differences on key terms and we could not reach an agreement. We hold high regard in our product and operational standards and abide by our commitments to Chinese players.’
‘We are honoured 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. 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.’
In an additional statement made on LinkedIn, Simon Zhu, president of global investment and partnership at NetEase was more biting in his assessment.
‘One day, when what has happened behind the scene could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make,’ Zhu said. ‘Feel terrible for players who lived in those worlds.’
Stay tuned for more news on Blizzard’s plans in China. It’s likely we’ll hear more about an alternative deal for publishing soon – but for now, service for the majority of games is set to be suspended in the region from 23 January 2023.