Millions of people play “World of Warcraft” every day. From summer onwards there will probably be even more. Because the online multiplayer game is returning to China after quarrels between developers and sales. An atypical step, as Beijing recently wanted to intervene more heavily in the video game market.
For years, China has looked critically at its multi-billion dollar video game industry. The government in Beijing sees the successful companies as an important economic support – but also dangers. The global market leader Tencent and NetEase are said to be too powerful and the risk of gambling addiction is constantly increasing. Restrictions for players in China follow, even stricter regulations for playing online games are planned for the end of 2023, but will be quietly removed at the beginning of the year. With two collaborations, the country in the Far East is now making a 180-degree turnaround for the gaming industry – and is bringing one of the most popular online games, “World of Warcraft” (WoW), back to the Chinese market.
If you want to publish video games in China, you have to make a deal with a Chinese developer. Beijing hopes to gain more control over the market in its own country. WoW developer Blizzard and Hangzhou-based company NetEase ended their 15-year partnership in 2023 after a bitter dispute, breaking the hearts of millions of fans in China. The servers for the online titles “World of Warcraft”, “Hearthstone” and “Diablo” were simply switched off.
NetEase employees destroyed WoW statue
It is not known why the deal fell through. However, NetEase saw the blame as Blizzard. In anger, Blizzard’s offices in China were destroyed by WoW fans and NetEase employees, as was a giant statue representing the game.
Both companies are said to have spent a year working on a new deal, which is now in place. The Blizzard titles are returning in the summer. In the press release about the cooperation, NetEase CEO William Ding speaks of the “next chapter based on trust and mutual respect.” But it is much more than that. It is an additional economic boost for the industry and the second largest Chinese game developer. NetEase was also able to reach a deal with Blizzard buyer Microsoft that will allow new titles on Chinese Xbox consoles in the future. But this no longer fits into the image of the government that was previously conveyed.
Sales before principles
Now popular titles are coming back to the Chinese market, as well as other games from Microsoft. That sounds more like opening up an industry than regulating it. In any case, Beijing underestimated the impact of the recently announced but not implemented regulations on the industry. The proposal to limit both game length and in-game purchases and reward systems worried both the Chinese video game industry and investors. The result: On the trading floors in New York, Hong Kong and Shanghai, the value of the largest Chinese developers shrank by around $80 billion within a few days. A powerful damper.
Sales seem to have more weight than that in China good intentions to protect the population from possible health consequences. Because “World of Warcraft” is the return of a game that, according to studies, has the highest potential for addiction. In the hugely popular online multiplayer game, players fight monsters and go on expeditions in the medieval world of Azeroth. Much more lucrative than the well-implemented idea itself are the purchases that can be made in the game. Thanks to more than two million active players every day, Blizzard generated more than five billion dollars in 2022 – at that time still including the Chinese market.
While figures for in-app purchases for WoW are not known, the example of “Hearthstone” shows how important the Chinese market is for Blizzard. Shrank by 57 percent the proceeds from the store integrated into the game in 2023. What meant tens of millions in losses in the case of the virtual card game offshoot of WoW is likely to be many times that in the case of the original.
However, it is not to be expected that Beijing will now give the video game industry a completely free hand out of greed for economic growth. Especially the months-long wait until summer is loud “New York Times” a sign that NetEase wants to relaunch the games more or less in accordance with the government.