Communications Sector

[gfp927z]

NetEase - >>> ‘Warcraft’ Returns to China as Blizzard and NetEase Settle Spat


Bloomberg

by Sabrina Mao and Zheping Huang

April 9, 2024


https://finance.yahoo.com/news/warcraft-returns-china-blizzard-netease-010000423.html


(Bloomberg) -- NetEase Inc. reached a new agreement to distribute games in China for Microsoft Corp.’s Blizzard Entertainment, salvaging a 15-year relationship and reviving titles like World of Warcraft for the world’s biggest gaming market.

With the deal, famed franchises like StarCraft, Diablo, Hearthstone and Overwatch will once again be live for players in China. The Hangzhou-based publishing giant and Microsoft’s Activision Blizzard subsidiary halted a longtime partnership in January of last year after failing to agree on an extension, causing a 15% plunge in NetEase shares in Hong Kong.

Separately, Microsoft’s gaming division and NetEase have agreed to explore bringing new NetEase titles to Xbox consoles and other platforms, the companies said in a statement.

“We are thrilled to embark on the next chapter, built on trust and mutual respect, to serve our users in this unique community that we’ve built together,” NetEase Chief Executive Officer William Ding said in the statement. The expiration of the previous deal descended into acrimony when the two sides alleged bad-faith negotiations for a renewal of the terms.

Blizzard suspended most online game services and sales in mainland China when the prior pact expired more than a year ago, cutting off a lucrative collaboration for both parties. Its major release in June 2023 — Diablo IV, which got off to a hot start internationally — hasn’t been officially available in China. The companies now say Blizzard games “will return to the market sequentially” starting in the summer, with further details to be provided at a later date.

Activision Blizzard was acquired in October by Microsoft in a $69 billion deal that set a record for takeovers in the video-game industry. The combined entity ranks No. 3 among global games publishers, behind Tencent Holdings Ltd. and Sony Group Corp., and was expected to seek a rapprochement with NetEase.

First signed in 2008 and renewed in 2019, the NetEase-Blizzard distribution accord has benefited both companies, feeding NetEase with globally recognized hits and giving its US partner a gateway into the world’s biggest PC and mobile gaming arena.

Before NetEase, Blizzard distributed World of Warcraft in China through Shanghai venture The9 from its release in 2004 through 2008. But that partnership ended in a rift, with Chinese players unable to access the game for more than a month. China’s No. 2 gaming giant swooped in as Blizzard sought to find a new local publisher, first signing a deal to run StarCraft II and Warcraft III, then taking over World of Warcraft, which at the time was the most popular online game in China.

<<<



---