Chinese games publisher NetEase said Wednesday it has rejected a proposal from Activision Blizzard to extend their long-standing partnership for another six months, while the US game developer looks for a new partner. NetEase said the proposal was “commercially illogical” and accused the US company of “seeking a divorce but still remaining attached”, in a rare public display of bitterness between the two gaming giants. Blizzard said in November it would end its 14-year partnership with NetEase – sending shockwaves throughout the industry as the partnership was widely seen as one of the most lucrative in video games.
The companies could not agree on key terms of cooperation and hits such as World of Warcraft will not be available in China, the world’s largest gaming market, from January 23.
NetEase said Blizzard reached out last week with an offer to extend the partnership for another six months, but also made it clear that it wouldn’t stop negotiating with other potential partners.
“In view of the non-reciprocity, unfairness and other strict conditions attached to the cooperation, the parties could not reach an agreement in the end,” China’s second-largest gaming company said in a statement.
The exact sticking points that soured the deal, which began in 2008 and was extended in 2019, remain unclear.
A person close to Blizzard said the dispute that sank the renewal revolved around commercial terms rather than data issues, as some media outlets had reported.
The individual, 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 of its intellectual property (IP).
In its statement late Tuesday, NetEase said it had never sought control of IP from Blizzard or other partners as a publishing company in the past 14 years.
“Any use and licensing of Blizzard’s IP was made in accordance with the terms of the contract and with Blizzard’s agreement and approval,” 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 game companies usually require a Chinese publisher before they can release games in China.
NetEase grew into a gaming giant partly by publishing Blizzard’s games in China. It has since accelerated its own game development capability, with in-house games now accounting for more than 60 percent of revenue.
© Thomson Reuters 2023
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