Blizzard Entertainment, the video game publisher and developer, recently announced the end of its partnership with the Chinese gaming company, NetEase. The decision has caused widespread concern among millions of loyal players who have been left without access to popular games like World of Warcraft. This split between the two companies became official after a series of heated discussions and disagreements that were primarily related to new regulations and restrictions imposed by the Chinese government on video games.
Misunderstandings and Disagreements
Sources familiar with the negotiations have revealed that there were misunderstandings, disagreements and perceived threats between Blizzard and NetEase. According to reports, NetEase had concerns about China’s government restrictions on video games, which included limiting young players to only three designated hours per week. Additionally, NetEase wanted to make changes to its contract with Activision Blizzard to comply with new regulations. However, Activision disputed that it should have had to disclose annual revenues or other details to Chinese regulators as requested by NetEase.
Disputes Over Licensing Agreement
A significant disagreement arose when NetEase proposed that Activision should license its games to the Chinese publisher instead of handling them as a joint venture. Activision objected to this proposal because it believed that doing so would force it to give up control over some aspects of its intellectual property. After failing to settle the differences, Activision offered a licensing agreement under the provision that NetEase would pay around $500 million upfront. However, this condition was described as being “commercially illogical” by NetEase.
Breakdown of Partnership Leaves Players Without Access
The final result of these prolonged discussions resulted in the downfall of one of China’s most valuable partnerships worth around $750 million per year. Moreover, most of Blizzard’s popular games, including World of Warcraft, are now unavailable in China because of the breakdown of this partnership. The split has left over three million Chinese players without access to their favorite games. The situation has been worsened by the fact that there is no clear indication when these games will be available again.
CEO Bobby Kotick Criticizes Sony’s Behaviour
In another development, Activision Blizzard CEO, Bobby Kotick, has criticized Sony’s recent behavior regarding the takeover by Microsoft. According to Kotick, Sony’s actions have been “disappointing” and that they have argued that Microsoft could release low-quality versions of Activision games on PlayStation consoles. Moreover, Sony was only concerned with blocking the takeover since they knew it would be bad for their business. Microsoft had made an offer to keep Call of Duty on PlayStation consoles for ten more years, but Sony declined the offer.
Future of Gaming Industry in China
The split between Activision Blizzard and NetEase highlights some of the challenges facing the gaming industry in China. The Chinese government has implemented a new set of regulations and restrictions aimed at curbing video game addiction among young people. These restrictions have had a substantial impact on many gaming companies operating in the country. For Activision Blizzard, it will be interesting to see how they tackle these regulations since they stand to lose over three million players due to their partnership collapse.
In conclusion, the end of the partnership between Activision Blizzard and NetEase is undoubtedly a significant setback for both companies involved. But it is also a clear indication of how new legislation and regulations could continue to disrupt gaming partnerships in China. While there may be hope for both entities to reconcile their differences, it remains to be seen if they will find common ground or move on entirely. For now, players will have to look elsewhere as their beloved games are unavailable due to this unfortunate split.
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