Gamers are lamenting the end of Warcraft in China as Blizzard and NetEase part ways

Nov 17 (Reuters) – Blizzard Entertainment (ATVI.O) and NetEase (9999.HK) caused consternation among thousands of gamers on Thursday by saying hits like ‘World of Warcraft’ won’t be available in China from next year as a 14 – years of cooperation ended.

NetEase shares closed 9% lower in Hong Kong after Blizzard said it was unable to reach a deal with the Hangzhou-based company that was in line with the California-based company’s “working principles and commitments to players and employees”.

Blizzard’s announcement, which did not provide further details, was the most trending topic on China’s Weibo platform with over 100 million views as users were shocked and saddened. Many said they had been playing the games for over a decade.

“My childhood was very marked by playing Hearthstone,” said one, while another lamented, “I’m so sad. I started playing Blizzard games from 2008…how do I say hello?”.

Blizzard said new sales will be suspended for the next few days and players will receive further details.

The games that will be discontinued at midnight on January 24 are ‘World of Warcraft’, ‘Hearthstone’, ‘Warcraft III: Reforged’, Overwatch’, the ‘StarCraft’ series, ‘Diablo III’ and ‘Heroes of the Storm’ Blizzard said.

NetEase grew to become China’s second-largest gaming company behind Tencent Holdings (0700.HK), largely thanks to the deals it struck in 2008 to become Blizzard’s publishing partner in China, when Blizzard closed its deal with The9 Ltd (NCTY.O) ended. .

NetEase later issued a statement in Chinese saying it was sorry for Blizzard’s revelation, while confirming that the two companies could not agree on key terms of cooperation.

In a statement in English, NetEase said that terminating the licensing agreements, which expire on January 23, would not have a “material impact” on its results.

“We will continue our promise to serve our players well until the last minute. We will ensure that our players’ data and assets are well protected in all our games,” said William Ding, CEO of NetEase, in a statement. declaration.

NetEase said the recently released “Diablo Immortal,” co-developed by NetEase and Blizzard, is covered by a separate long-term agreement, allowing service to continue in China.

It said Blizzard’s games contributed a low-single-digit percentage to total net sales and income in 2021 and the first nine months of 2022.

In a Nov. 9 research report, Daiwa Capital Markets estimated that the absence of Blizzard games could cut NetEase’s revenue by 6-8% next year.

This was based on an estimate that licensed games account for about 10% of NetEase’s total revenue and Blizzard for 60-80% of licensed games.

Reporting by Bharat Govind Gautam in Bengaluru; Adaptation by Rashmi Aich, Savio D’Souza, Sherry Jacob-Phillips and Alexander Smith

Our Standards: The Thomson Reuters Principles of Trust.

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