Chinese games maker NetEase said on Wednesday it had turned down a proposal from Activision Blizzard to extend its long-standing partnership by six months as the US games developer searches for a new partner. NetEase said the proposal was “commercially illogical” and accused the US firm of “seeking a divorce but still staying connected,” in a rare public display of acrimony between the two gaming giants. Blizzard said in November that it was ending its 14-year partnership with NetEase — sending shockwaves across the industry as the partnership was widely viewed as one of the most lucrative in video games.
The companies could not agree on important terms of cooperation, and hits such as World of Warcraft will not be available in China, the world’s largest gambling market, from January 23.
NetEase said blizzard came forward last week with an offer to extend the partnership by six months, but also made it clear that it will not stop negotiating with other potential partners.
“In the end, given the non-reciprocity, unfairness and other strict conditions attached to the cooperation, the parties could not reach an agreement,” China’s second-largest gaming company said in a statement.
The exact sticking points that soured the deal, which began in 2008 and was renewed in 2019, remain unclear.
A person close to Blizzard said the dispute that scuppered the renewal revolved around commercial terms rather than data issues, as some media outlets had reported.
The person, who declined to be identified due to the sensitivity of the issue, said NetEase had proposed making structural changes to the partnership that would affect Blizzard’s control over its intellectual property (IP).
In its statement late Tuesday, NetEase said it had never solicited control of intellectual property from Blizzard or any non-publishing partner in the past 14 years.
“All use and licensing of Blizzard’s intellectual property has been done in accordance with the terms of the Agreement and with Blizzard’s consent and consent,” it said.
Activision Blizzard did not immediately respond to a Reuters request for comment.
With the end of their partnership, Blizzard is currently without a Chinese publisher. Unlike other countries, foreign gambling companies usually need a Chinese publisher before they can publish games in China.
NetEase rose to become a gaming giant, in part by releasing Blizzard games in China. It has since accelerated its own game development capabilities, with internal games now accounting for more than 60 percent of revenue.
© Thomson Reuters 2023
