Little bomb dropped in the world of online gambling. Tonight, Blizzard has announced that it is ending its partnership with NetEase.. Lhe Chinese company providing online services has been publishing the games of the American giant on Chinese territory since 2008. Their contract ends in January 2023, and an agreement could not be reached to renew this partnership.
An announcement potentially heavy with consequences if no solution is found, when we know the importance of the Chinese market in the video game industryand especially for Blizzard.
Which games impacted?
From January 23, 2023, all these games are no longer accessible on Chinese territory:
Diablo Immortal will however remain accessible due to the fact that the game is part of another contract between the two companies. Microtransactions will be suspended in the coming days. Expansions for World of Warcraft (Dragonflight), Hearthstone (March of the Lich King) and Season 2 of Overwatch 2 will indeed be released, but will only be available until January 23, 2023.
It is therefore a huge part of its global players that Blizzard will have to part with. Temporarily or permanently? Hard to say today, but we suspect that Blizzard has no desire to let go of this colossal number of users for many reasons, especially financial. Mike Ybarrathe president of Blizzard has already announced “seek solutions in order to bring all these games back to Chinese players in the future”.
Causes and consequences ?
We have known since last August that tensions between the two companies had recently surfaced. For good reason, they had been in collaboration for more than three years on the development of an MMORPG for mobile in the Warcraft universe that was eventually put on hold — mostly for disagreements and financial reasons. Their relations since would not have calmed down, and certainly did not help to find a renewal agreement.
Almost all Blizzard games are booming right now. World of Warcraft and Hearthstone are releasing their long-awaited expansions, Overwatch 2 is breaking records, and Diablo 4 would be out in April 2023. So it’s a terrible time to lose so many players. Especially when you know that Chinese players have represented more than half of all World of Warcraft players in recent years, although this number has been declining, due in particular to restrictions put in place by the Chinese government.
On the eve of their acquisition by Microsoft for the modest sum of 69 billion dollars, this news could have multiple consequences. We imagine that this is terrible news for investors and the stock market rating of Activision Blizzard in the short term. However, the European Commission had recently opened a secondary investigation into the potential monopoly of the merger of the two giants on the video game market. With the Chinese market irrelevant (only for Blizzard games, not Activision/King/Xbox), this may be one less thorn in the side.
Blizzard will however in the future have to find a new Chinese partner like Tencent (the #1 in China) with which to publish its games in order to return to this successful market. The financial losses would be such that many jobs could be in jeopardy, and development problems for the company’s future projects could appear…
Definitely, it looks like Phil Spencer, the CEO of Microsoft Gaming, has not finished speaking on the takeover of Activision Blizzard. This time, he wants to reassure fans about the Call of Duty license.
Call of Duty: Modern Warfare 2