The severance of its partnership with Chinese publisher NetEase and the withdrawal of Activision Blizzard games from the local market have caused waves in the gaming community. A New York Times report sheds some light on the matter.
this month of january the vast majority of Blizzard games have disappeared from the Chinese market. The event was the result of a dispute between the American giant and NetEase, which distributed Activision Blizzard products in China.
The turbulent breakup left thousands of disgruntled Chinese gamers in its wake, along with a host of questions about the reasons behind it. Reports recently published by the New York Times provide pointers and answers.
The apple of discord
According to the NYT article, one of the biggest events ending the partnership of the two companies was the October talks about continuing the cooperation. According to testimonies Both parties reportedly left the meeting with very different interpretations of what was said at the meeting.. As the text says:
“(…) What NetEase executives viewed as a conciliatory gesture was seen by Activision executives as a threat. A month later, the companies broke off the talks entirely.”
The unstable subject would turn out to be the growing interest of the Chinese government in the video game market and the consequent regulations imposed on the private sector by the Chinese Communist Party. The issue was not helped by the fact that the country’s governing bodies viewed companies linked to foreign capital with growing suspicion.
NetEase had asked the American giant on this occasion to provide it with certain required information and documents (such as annual revenues), which, according to the Chinese company, were necessary to prepare for the new market.
- The request was denied by Activision Blizzard.
- The fact that NetEase allegedly tried to force the publisher to sign a new agreement added fuel to the fire.under which the Chinese company would have a full publishing license.
- According to the Asian company, such a scheme diverted the CCP’s attention from a company with close ties to foreign capital.
- Activision Blizzard again rejected the offer, viewing the cited arguments as excuses to force a better deal on the Chinese.
previous problems
Issues with new government regulations and verbal disagreements were not the start of friction between Activision Blizzard and NetEase, however.
The controversial CEO of the American company was also problematic: Bobby Kotick.. His displeasure was sparked by an investment in which NetEase was going to financially support Bungie. The Destiny developers failed to meet the deadlines imposed by their contract with Activision at the time. According to Kotick, the Chinese company’s financial backing was to expose his business to further delays and losses.
The blow that broke the camel’s back was a conversation between the CEOs of the two companies about Microsoft’s potential acquisition of Activision Blizzard.. As reported by NYT informants:
“(…) Kotick and William Ding, CEO of NetEase, discussed how various antitrust authorities around the world were reviewing Microsoft’s $70 billion deal to buy Activision. (…) At one point in the conversation, which was conducted through translators, Activision executives felt that Ding was threatening Kotick. The Chinese government was considering the acquisition of Microsoft, and the executives recalled that Ding said NetEase could get the government to block or back the deal depending on the outcome of the licensing dispute. (…)»
NetEase representatives, however, denied that the statements in question constituted a threat directed against Activision Blizzard:
“The idea was that if Activision failed to honor the license agreement, Microsoft would face the same regulatory hurdles when acquiring the company.”
bitter farewell
Despite the dramatic end to the long war between the two giant corporations over Chinese gamers, in an official press release, Activision’s VP mentioned the “very positive” experience of being in the Chinese market, adding:
“While the association took a surprising and disturbing turn, it’s important to recognize that this finding was an anomaly,” said Michael Lee, vice president of Activision Blizzard.
The NetEase spokesperson only mentions that the company has moved on, briefly adding:
“We suggest Activision Blizzard do the same.”
Other plans by the American giant to solve the publishing problem in China remain a mystery. The partnership was estimated to be worth around $750 million in annual revenue..
As reported by industry websites, nearly 3 million Chinese gamers felt the removal of Blizzard games from distribution. In the case of World of Warcraft alone, that’s about 100,000 people. Teams and esports leagues associated with, for example, the Overwatch 2 setting also face a major challenge.