The Activision Blizzard and NetEase partnership brought popular titles to China without issue for 14 years, but details have shown a messier situation.
Its been a few months since the relationship between Activision Blizzard and NetEase drew to a close, with the casualty being the entire populace of China being unable to play hit Blizzard Titles such as World of Warcraft, Overwatch 2, and Diablo 3. This eventually culminated in a petty event where NetEase destroyed a statue of the Gorehowl axe, which ironically was used as a gift canonically in-game, yesterday, The New York Times released more details that could shed a broader light on the situation.
After new China anti-trust amendments have been put into place, NetEase wanted Blizzard to file the appropriate documentation with the government to avoid fines associated with failing to comply with the new regulations. Shortly after, NetEase reportedly wanted to end their over-a-decade-long agreement and instead asked Blizzard to license their titles and properties directly to NetEase, which would ultimately give NetEase more control over the licenses offered, as well as an easier route to avoid fines from the government.
Veteran Gaming Executive Andrew Tang said NetEase is “under a lot of pressure the last couple of years because of all these crackdowns and limiting kids’ play,” insinuating NetEase was using the new government regulations as a means to get a better deal from Activision Blizzard. In October, Activision CEO Bobby Kotick and NetEase CEO William Ding discussed potential solutions to the issues the companies faced with the anti-trust regulations and fines now surrounding gaming in China, the report goes on to say this is where things got strained.
Apparently, a mistranslation from Ding towards Kotick resulted in further strained tensions, the NYT report outlines, “Activision executives felt that Mr. Ding threatened Mr. Kotick. The Chinese government was reviewing the Microsoft acquisition, and the executives recalled that Mr. Ding said NetEase could sway the government either to block or support that deal depending on the outcome of the licensing discussion,” but this was allegedly blown out of proportion, and NetEase did not intend to ‘threaten’ Activision.
Activision counteroffered with a deal that would give them a whopping $500 million up front for the licensing deal, a deal NetEase called illogical. As time was running out to get a deal done, Activision Blizzard made a last-ditch effort to extend their relationship six months while they look for another partner to license Blizzard titles in China, and NetEase compared the suggestion to “staying together while being divorced.”
Fast forward to the present, the relationship between NetEase and Activision Blizzard remains collapsed. Blizzard President Mike Ybarra did say in a statement attempting damage control over the $750 million dollar partnership, “We’re immensely grateful for the passion our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” with “Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future” regarding their deal, and a potential future in licensing to China.
Fans can read the full long-form report from the NYT here.