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NetEase has announced that it is breaking a long-standing agreement to publish games in China for Blizzard Entertainment.
As of Jan. 23, NetEase said its license to publish Blizzard titles in China is expiring. The affected games are World of Warcraft, the StarCraft series, Hearthstone, Heroes of the Storm, Overwatch, and Diablo III.
During this time, NetEase has grown to become one of China’s leading internet and online game service providers, ranked the No. 5 largest game company in the world according to market researcher Newzoo. Activision Blizzard, which owns Blizzard, is number 9 on the list.
“We have made great efforts and tried to negotiate with Activision Blizzard with the utmost sincerity so that we can continue our partnership and serve the many dedicated players in China,” William Ding, CEO of NetEase, said in a statement. “However, there were material differences of opinion on key points and we were unable to reach an agreement. We are committed to our product and operational standards and abide by our commitments to Chinese players.”
Ding added: “We are honored to have had the privilege of serving our gamers over the past 14 years and have shared many precious moments with them in that time. We will continue our promise to serve our players well until the last minute. We will ensure that our players’ data and assets are properly protected in all of our games.”
In its latest earnings announcement, Activision Blizzard also noted that there was a risk that the agreement would not be renewed.
NetEase said the net revenue and net revenue contribution from these licensed Blizzard games represented a low-single-digit percentage of NetEase’s total net revenue and net revenue in 2021 and in the first nine months of 2022.
The expiration of such licenses will not materially affect NetEase’s financial results, the company said. And it said the co-development and publishing of Diablo Immortal is covered by a separate long-term agreement and will continue.
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