NetEase rejected game licence extension offer, Blizzard says
Sign up now: Get ST's newsletters delivered to your inbox
The rejection sets the stage for the withdrawal of Blizzard games like World Of Warcraft from China, the top gaming market.
PHOTO: AFP
Hong Kong – NetEase has turned down an offer from American games publisher Blizzard to extend their China licensing agreement by six months, setting the stage for the withdrawal of global titles like World Of Warcraft from the top gaming market.
The potential extension, under the existing terms, was an option included in the two companies’ most recent deal in 2019, Blizzard said in a statement on Tuesday. NetEase declined to take it up, according to the United States firm, and absent an alternative provider to take over from NetEase, Blizzard’s content and online services will be withdrawn from China on Jan 23, the final date of its existing agreement.
Blizzard and NetEase broke off talks late last year on a new licensing agreement that would have prolonged their 14-year partnership of delivering Blizzard titles to the Chinese market. The mutually beneficial relationship has helped build NetEase into China’s second-biggest games distributor after Tencent Holdings, and gave the Activision Blizzard unit a reliable partner for franchises like Diablo, Warcraft and Overwatch.
NetEase shares had plummeted after the initial November announcement, but recovered after the Hangzhou firm said Blizzard games contributed only a low single-digit percentage of its revenue and profit.
“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,” NetEase founder and chief executive officer William Ding said at the time.
Sentiment on China’s Weibo social service has been largely critical of Blizzard, with users pointing to the company’s efforts at an extension as a means to bridge the gap while it negotiates a better deal with a competitor.
World Of Warcraft players in China will have the option to store their progress via a new service to be provided by Blizzard, the company said. Blizzard continues to be engaged in discussions with alternative distribution partners to help avoid the cut-off of its services in China, it added. BLOOMBERG
