Chinese games publisher NetEase announced on Wednesday that it has declined Activision Blizzard’s proposal to extend their long-standing partnership for six months. This comes as Activision Blizzard, the US game developer, searches for a new partner. NetEase deemed the proposal “commercially illogical” and accused Activision Blizzard of wanting to “seek a divorce but still remaining attached.” This public display of acrimony between the two gaming giants is rare. The termination of the 14-year partnership between Blizzard and NetEase, announced in November, caused tremors throughout the industry as it was one of the most profitable collaborations in the world of video games.
The inability of the two companies to reach an agreement on crucial cooperation terms means that games like World of Warcraft will no longer be accessible in China, the largest gaming market globally, starting from January 23.
NetEase revealed that Blizzard recently offered to extend the partnership for six months while also expressing its intention to negotiate with other potential partners. “The parties could not reach an agreement in the end due to non-reciprocity, unfairness, and other stringent conditions attached to the cooperation,” stated China’s second-largest gaming company.
It remains unclear which specific points of contention led to the breakdown of negotiations. However, a source close to Blizzard clarified that the dispute revolved around commercial terms rather than data-related issues, as some media outlets had reported. The source, who preferred to remain anonymous due to the sensitivity of the matter, disclosed that NetEase had proposed structural changes to the partnership that would impact Blizzard’s control over its intellectual property (IP).
In response to these claims, NetEase emphasized in a statement that it had never requested IP control from Blizzard or any other partners throughout their 14-year publishing history. “Any usage and licensing of Blizzard’s IP were conducted in accordance with contract terms and with Blizzard’s consent and approval,” NetEase asserted.
Activision Blizzard has not yet issued a response to Reuters’ request for comment.
With the termination of their partnership, Blizzard currently lacks a Chinese publisher. Unlike in other countries, foreign gaming companies usually require a Chinese publisher before releasing games in China.
NetEase, which rose to become a gaming giant partly thanks to publishing Blizzard’s games in China, has significantly increased its own game development capabilities. In-house games now contribute over 60 percent of NetEase’s revenue.
© Thomson Reuters 2023
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