Nov 17 (Reuters) – Blizzard Entertainment ( ATVI.O ) and NetEase ( 9999.HK ) sparked consternation among thousands of gamers on Thursday by saying hits such as “World of Warcraft” will not be available in China from next year as 14. -The year the collaboration ended.
NetEase shares closed 9% lower in Hong Kong after Blizzard said it was unable to reach an agreement with the Hangzhou-based company that was consistent with the company’s “operating principles and commitments to headquarters in California with the players and employees.”
Blizzard’s announcement, which did not provide further details, was the top trending topic on China’s Weibo platform with more than 100 million views as users expressed shock and sadness. Many said they had been playing their games for over a decade.
“My youth was really marked by playing Hearthstone,” said one, while another lamented: “I’m so sad. I started playing Blizzard games from 2008… how can I say goodbye?”
Blizzard said new sales would be suspended in the coming days and players would receive more details.
Games that will be suspended before midnight on Jan. 24 include “World of Warcraft,” “Hearthstone,” “Warcraft III: Reforged,” Overwatch, the “StarCraft” series, “Diablo III” and “Heroes of the Storm” . , Blizzard said.
NetEase became China’s second-biggest gaming company behind Tencent Holdings ( 0700.HK ) largely because of deals it struck in 2008 to be Blizzard’s publishing partner in China, when Blizzard end its agreement with The9 Ltd (NCTY.O). .
NetEase later issued a statement in Chinese saying it was sorry to see Blizzard’s disclosure, while also confirming that the two companies were unable to agree on key terms of cooperation.
In an English-language statement, NetEase said ending the license 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 NetEase CEO William Ding. in a statement.
NetEase said that the recently released ‘Diablo Immortal’, jointly developed by NetEase and Blizzard, is covered by a separate long-term agreement, allowing its service to continue in China.
It said Blizzard games contributed a low-single-digit percentage to its total net revenue and net 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 reduce NetEase’s revenue by 6 to 8 percent next year.
This was based on an estimate that licensed games account for around 10% of NetEase’s total revenue and Blizzard accounts for 60-80% of licensed games.
Reporting by Bharat Govind Gautam in Bangalore; Editing by Rashmi Aich, Savio D’Souza, Sherry Jacob-Phillips and Alexander Smith
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