Blizzard Entertainment has announced they will be suspending game services and new sales in China starting January 2023.
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As announced on November 17th via Activision Blizzard’s investor relations website, the once beloved studio “will be suspending most game services in mainland China due to the expiration of the current licensing agreements with NetEase, Inc. on January 23, 2023.”
“This includes World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the StarCraft series, Diablo III, and Heroes of the Storm,” the company statement clarified.
In an aside regarding Diablo Immortal, Blizzard noted that the mobile title’s “co-development and publishing is covered under a separate agreement between the two companies.”
“Blizzard Entertainment has had licensing agreements with NetEase since 2008, covering the publication of these Blizzard titles in China,” they continued. “The two parties have not reached a deal to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees, and the agreements are set to expire in January 2023.”
As such, Blizzard confirmed that they “will suspend new sales in the coming days and Chinese players will be receiving details of how this will work soon.”
However, the company also emphasized that the “upcoming releases for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and season 2 of Overwatch 2 will proceed later this year.
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“We’re immensely grateful for the passion our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” Blizzard President Mike Ybarra asserted in conclusion to the announcement. “Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.”
A surprising announcement, this decision means Activision Blizzard’s soon-to-be-new-owner Microsoft will be losing out on a purported goldmine of untapped players.
And while this situation may seem financially dire on the surface, the loss of China’s gaming market may not be as devastating as some may presume.
According to an October 2022 report from market analytics firm Niko Partners, China is currently projected to spend roughly $45.44 Billion USD on video game software and services.
Though this number may seem impressive, as per Niko Partners, it actually represents a -2.5% drop in year-over-year revenue – or in other words, “the first decline in 20 years of Niko tracking the China video games market”.
This drop, said Niko Partners, was “due to lower spending on mobile games partially offset by growth across PC and console games,” as well as “downward macroeconomic factors, restrictive regulations, a lack of new licenses, and underperformance of newly launched titles”
“China’s economy, Zero COVID policy, impact of youth gamers regulations, and a lack of new game ISBN licenses have contributed to the adverse changes in the domestic games market,” opined the firm’s president and founder, Lisa Hanson.
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However, Hanson also noted that her firm currently “forecasts recovery and a compound annual growth rate of 2.6% from 2021-2026 based on anticipation for new games augmenting portfolios of legacy titles and industry stakeholder adjustments to youth regulations
Nonetheless, this move is still sure to come as a devastating blow to Blizzard, who in recent years has been actively invested in expanding their presence within the Red Dragon – much to the detriment of players back home.
In 2019, during the Hearthstone World Championships, Chung “Blitzchung” Ng Wai mentioned the free Hong Kong movement in his post-match interview.
He was then stripped of his winnings and banned from participating in any future tournaments.
This led to near-universal backlash from not only players, but even a bipartisan selection of US senators, to the point where then-Blizzard President J. Allen Brack eventually issued a non-apology for “moving too quickly” on the matter at BlizzCon 2019.
Further, up until the company’s 2022 sale to Microsoft, Activision Blizzard was owned in part – 5% to be exact – by notorious Chinese media conglomerate Tencent.
At the time of writing, it is unclear if Blizzard’s games will return to China under a different licenser, or if the conclusion of their deal with NetEase will truly signal the end of their amibitions within the communisty country.
Whichever way the wind blows, it’s clear that – in the spirit of the themed Lunar New Year skins included throughout their many games – Blizzard will be making a very difficult journey (back) to the West.
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