Chinese tech firm NetEase has reportedly refused to renew its long-standing partnership with Blizzard China. Embattled in controversies and regulatory concerns, Activision Blizzard has been in a tough spot for the past few years. Now it appears there may be more trouble ahead for the gaming giant.
Home to numerous massively popular franchises such as Overwatch, Call of Duty, and World of Warcraft, Activision Blizzard has been making the news more often than not in recent times. A large part of this is due to the company's pending $68.7 billion acquisition by Microsoft. As of now, both regulators and other tech giants in the industry are challenging the deal over concerns that it will give Microsoft an unprecedented advantage in gaming. In addition to the FTC's filing and opposition from the likes of Sony, Nvidia, and Google, now the EU is expected to object to the Activision Blizzard acquisition. Though it looks like the company may have to brace for more challenges in the year ahead, particularly as one of its longest-running partnerships seems to have fallen apart.
In a statement on Weibo, Blizzard China mentioned that it contacted NetEase to extend its 14-year partnership with the Hangzhou-based company, which NetEase had declined to do so. "It is a pity that NetEase is not willing to extend services of our game for another six months on the basis of existing terms as we look for a new partner," the statement claimed. The fallout means that Blizzard will shut down game services in China on January 23 as announced back in November 2022. At the time, NetEase claimed that it looked to extend the agreement, but found that it couldn't agree to the US gaming giant's terms.
It's worth noting that the Diablo maker's six-month extension proposal reportedly came after NetEase reportedly dispersed the local team responsible for handling its games in the country. Most of the team from NetEase affiliate Shanghai EaseNet Network Technology had already disbanded the staff, while others are said to have been transferred internally. Though Blizzard China claims that its efforts will continue as the company looks to find a partner that "shares the same beliefs" to help it serve China, one of the biggest markets for video games.
Since foreign game companies typically can't operate in China without a Chinese publisher, the door may be shutting for Blizzard in the country. Of course, the gaming giant has faced issues over its operations in China numerous times before. For instance, back in June 2022, Diablo Immortal came under fire after a social media post mocking China's president, Xi Jinping. But the failed agreement extension with NetEase marks a more worrying situation for the company as Blizzard loses one of its most lucrative long-term deals. It's unclear if Blizzard will manage to strike a bargain with another Chinese partner anytime soon. For now, it looks like the US company will be moving out.
Source: South China Morning Post