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NetEase confirms it’s breaking up with Blizzard Entertainment

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NetEase announced that it is breaking up a longstanding agreement to publish games in China for Blizzard Entertainment.

Starting on January 23, NetEase said that its license to publish Blizzard titles in China will expire. 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 be one of China’s leading internet and online game services providers, ranking as the No. 5-largest game company in the world, according to market researcher Newzoo. Activision Blizzard, which owns Blizzard, is No. 9 on the list.

“We have put in a great deal of effort and tried with our utmost sincerity to negotiate with Activision Blizzard so that we could continue our collaboration and serve the many dedicated players in China,” said William Ding, CEO of NetEase, in a statement. “However, there were material differences on key terms and we could not reach an agreement. We hold high regard in 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 during that time. We will continue our promise to serve our players well until the last minute. We will make sure our players’ data and assets are well protected in all of our games.”

In its last earnings announcement, Activision Blizzard also noted there was a risk its agreement would not be renewed.

NetEase said the net revenues and net income contribution from these licensed Blizzard games represented low single digits as a percentage of NetEase’s total net revenues and net income in 2021 and in the first nine months of 2022.

The expiration of such licenses will have no material impact on 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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