Blizzard and NetEase break up, ending support for key titles in China

Blizzard is splitting with Chinese licensing partner NetEase and will be suspending most Blizzard game services in mainland China as a result.

The company said it will be ending support for World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the Starcraft series, Diablo III, and Heroes of the Storm on January 23, 2023, “due to the expiration of the current licensing agreements with NetEase.”

Blizzard and Netease will continue to work together to co-develop and publish Diablo Immortal in China because that partnership is covered under a separate agreement.

Blizzard and NetEase have been working together through licensing agreements since 2008 with the aim of bringing some of the U.S. studio’s biggest franchises to players in China.

It’s unclear why the two are now severing ties after almost 15 years, but Blizzard said it has been unable to renew the agreements in a way that’s consistent with its “operating principles and commitments to players and employees.”

New game sales in the region will be suspended in the coming days, although the upcoming releases of World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and the second season of Overwatch 2 will proceed later this year.

“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,” said Mike Ybarra, president of Blizzard Entertainment. “Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.”

NetEase, meanwhile, indicated it was Blizzard that pulled the plug on the partnership. In a press release shared with investors, the company said it tried with “utmost sincerity” to negotiate with Blizzard, but that “material differences on key terms” ultimately hampered talks.

“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,” said William Ding, CEO of NetEase.

NetEase also said the expiration of the licensing agreement will have “no material impact” on its fiscal results, largely because the net revenues and net income contribution from Blizzard titles represented “low single digits” as a percentage of its total net revenues and net income in 2021 and the first nine months of 2022.