NetEase, the Chinese games publisher, has rejected a proposal from Activision Blizzard to extend their long-standing partnership by six months. In an unprecedented display of acrimony between the two gaming giants, NetEase deemed the proposal “commercially illogical” and accused Activision Blizzard of wanting to sever ties while remaining attached. This came as a shock to the industry, as their partnership was considered one of the most lucrative in the video game market.
The companies were unable to reach an agreement on crucial cooperation terms, resulting in popular games like World of Warcraft being unavailable in China, the largest gaming market in the world, starting January 23.
Last week, Activision Blizzard approached NetEase with an offer to extend the partnership for six months, but also made it clear that it would continue negotiating with other potential partners.
NetEase, China’s second-largest gaming company, stated, “Due to non-reciprocity, unfairness, and stringent conditions in the cooperation, an agreement could not be reached in the end.”
The specific issues that caused the deal to sour, which began in 2008 and was renewed in 2019, remain uncertain.
According to a source close to Blizzard, the dispute centered around commercial terms rather than data concerns, contrary to what some media outlets had reported.
This source, who chose to remain anonymous due to the sensitivity of the matter, revealed that NetEase had proposed structural changes to the partnership that would impact Blizzard’s control over its intellectual property (IP).
In its statement, NetEase emphasized that it had never sought control over IP from Blizzard or any other partners throughout its 14-year tenure as a publishing company.
“Any usage and licensing of Blizzard’s IP were conducted in accordance with contractual terms and with Blizzard’s consent and approval,” NetEase clarified.
Activision Blizzard has not responded to a request for comment from Reuters at this time.
As a result of the partnership’s collapse, Blizzard is currently without a Chinese publisher. Unlike in other countries, foreign gaming companies typically require a Chinese publisher to release games in China.
NetEase initially rose to prominence by publishing Blizzard’s games in China. However, it has since focused on developing its own games, which now generate over 60% of its revenue.
© Thomson Reuters 2023
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