Multiple Blizzard Entertainment have ceased operations in China, as they have been unable to repair their partnership with NetEase.
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Suspending nigh-all Blizzard game services in China, the agreement between Blizzard Entertainment and NetEase ended January 23rd — according to three individuals “familiar with the matter.” NetEase’s team for handling those games dissolved just over a week before, the South China Morning Post reports.
“Most” of the up to 100 staff working at the Shanghai EaseNet Network Technology affiliate have either been laid off, or had internal transfers, such as a select few technical staff to other Shanghai offices. Even so, most staff had reportedly left after the news about the agreement not being renewed broke in November last year.
A mere ten people remain, handling the suspension of numerous services, and aren’t expected to remain any longer than six months.
This and other elements mean re-negotiation is almost impossible in the near future, with only Diablo Immortal (co-developed by NetEase and Blizzard Entertainment) remaining in operation as it had a separate agreement. Those who handle game’s operations at NetEase will be unaffected by the layoffs.
NetEase being the second largest video game company in China (by revenue) means that “several Chinese companies” had sent delegates to the US to aid in negotiations since December 2022. One source stated a deal before the cut-off date seemed unlikely.
PCGamesN reports that Blizzard Entertainment had reached out, offering the doomed partnership be extended six months. In an earlier version of a Reuters article, Blizzard China reportedly stated, “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.” NetEase was certainly not impressed.
The official NetEase statement (machine translated by DeepL) opens, “Today, Blizzard China through its official microblogging published ‘Blizzard on the national service player community update note’, some of the news directly pointed to NetEase, and because of the content, triggered a lot of market and media criticism, we would like to explain the following.”
“On November 17, 2022, Activision Blizzard announced that it would suspend the service of Blizzard games distributed by Shanghai NetEase in mainland China, effective at 00:00 on January 24, 2023,” NetEase explained. “Blizzard China issued an updated statement today (January 17, 2023) stating that during this period Blizzard has initiated a search for a new partner.”
“For unknowable reasons, last week Blizzard re-sought NetEase with an offer of a so-called six-month extension of the game service and other conditions, and made it clear that it would not stop continuing negotiations with other potential partners during the contract extension,” the company claims.
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“And as far as we know, Blizzard’s negotiations with other companies during the same period were all based on a three-year contract period,” NetEase adds. “Considering the non-reciprocity, unfairness and other conditions attached to the cooperation, therefore, the parties could not reach an agreement in the end.”
“In our view, Blizzard’s proposal – including today’s surprise announcement – is brash, unseemly and commercially illogical,” the statement derides. “Its overconfidence does not take into account where players and NetEase have been placed by this kind of give-and-take, donkey-riding, and divorce-having behavior.”
This would mean the Chinese phrase “riding a donkey while looking for a horse,” and that Blizzard were seeking a “divorce,” yet still wanted to have the benefits of working with NetEase.
Last week, “a person close to Blizzard” told Reuters that NetEase allegedly pitched a change in the partnership deal that would have affected Blizzard Entertainment’s control over their IP. NetEase addressed this allegation as well. “We are concerned that some media have received rumors that NetEase wants to control Blizzard IP.”
“In the past 14 years of long-term cooperation, NetEase has used and licensed any Blizzard IP in accordance with the terms of the contract, and has obtained Blizzard’s consent and approval. All IP cooperation with other partners is also based on this principle,” NetEase insisted.
NetEase’s third point was disputing the announcement that Chinese World of Warcraft players would be able to archive their progress.
“For Blizzard China in its statement mentioned about tomorrow […] launch of the ‘World of Warcraft’ game progress archive function, we are obliged to remind all players, the function for Blizzard unilaterally proposed and developed online, without NetEase side testing, use, there may be unknown security risks,” NetEase warned.
“If this feature causes loss of virtual property or inability to play, Blizzard shall bear full responsibility.”
“When the farewell is destined to become the final chapter of the story, NetEase also still hope to do their best to accompany the players through the last time, to serve the players to the last moment,” the Chinese publisher attempted to reassure.
NetEase then concluded, “From now on, no matter where you are, no matter where you want to go, may the wind guide your path, may the stars light your way forward. Of course, the most important thing is to wish everyone a happy New Year.”
Parent company Activision Blizzard was also scorned, with PCGamesN reporting NetEase accused them of making “endless, exorbitant demands, taking free rides, and taking all advantages without responsibilities.”
“A person close to Blizzard” also told Reuters one reason for the dispute was over commercial terms, as opposed to “just” issues with data, as others has reported.
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For those still holding out hope, eSports caster Alan Gai revealed that “Netease is dismantling the axe statue of WOW in Netease Hangzhou. And it is on live through the official channel of NAKARA BLADEPOINT, which is product of Netease.”
The demolition was also shown on TikTok, though via chaijingNDS. According to VGC — those tearing it down were given “Blizzard Green Tea” to drink after, and even the cups can be seen with “NetEase Coffee” printed on the side.
It should be noted “green tea b-tch” is Chinese slang for a manipulative woman who acts sophisticated and pleasant (like green tea) in order to use men. That is “use” in the literal sense, as acquiring a successful man to marry isn’t always the goal, and it can be as simple as having one of them bring her lunch.
For example, she may feign interest in high-brow hobbies or act innocent to attract a man, or make self-deprecating comments to bait attention and compliments. She’ll happily keep a large number of male friends to help her in various ways (making it blatant she is single), while female friends are only there to make her look better.
The comparison, based on NetEase’ comments on Blizzard Entertainment, is clear.
It seems Blizzard Entertainment may have finally gotten the point, as the Lunar New Year event (standing in for Chinese New Year) in Overwatch 2 reportedly used mostly recycled costumes and cosmetics from previous events in Overwatch.
Dexerto reported the “near-unanimous disappointment from its fanbase,” while PlayStation LifeStyle claimed “fans feel like the event has already been ruined” because of the aforementioned recycling done by the developer.
In November last year, Activision Blizzard announced that Blizzard Entertainment would be suspending all game services in China starting January 2023. They revealed that “a deal to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees,” had not been reached with NetEase.
Likewise, NetEase stated that, despite making their “best effort” in negotiations, “there were material differences on key terms and we could not reach an agreement. We hold high regard in our product and operational standards and abide by our commitments to Chinese players.”
Far less amicable comments arose from Simon Zhu, President and Global Investment and Partnership of NetEase Games. He stated on LinkedIn shortly after the announcement “As a gamer who spent ten thousand hours in the world of Azeroth, starcraft and overwatch, I feel so heartbroken as I will not longer have the access to my account and memories next year.”
“One day, when what has happened behind the scene could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make,” Zhu spat. “Feel terrible for players who lived in those worlds.”
The individual Zhu is discussing could be anyone on the Activision Blizzard side involved with negotiating the agreement. EuroGamer speculated it could have been CEO of Activision Blizzard Bobby Kotick and his prior controversies.