NetEase Plummets After Ending China Deal for Blizzard Games
NetEase Inc. and Blizzard Entertainment Inc. plan to end their 14-year partnership after January, depriving the Chinese firm of a slice of revenue and suspending service for some of the country's most popular games. NetEase shares plunged.
The Hangzhou-based publishing giant and Activision Blizzard Inc. subsidiary failed to agree on an extension to their long-running collaboration, which had encompassed famed franchises like StarCraft, Diablo, Overwatch and World of Warcraft. Blizzard will suspend most online game services in mainland China from Jan. 23, the US company said on Wednesday. Game sales will also halt in the coming days.
Beyond financial terms, key sticking points to the NetEase extension were ownership of intellectual property and control of the data of millions of players across China, people familiar with the discussions said. The people spoke on condition of anonymity because the talks weren't public.
The affected games represented a low-single-digit percentage of NetEase's total revenue and profit, the Hangzhou firm said in a separate statement.
“We have put in a great deal of effort and tried with our utmost sincerity to negotiate with Activision Blizzard so that we could continue our collaboration and serve the many dedicated players in China,” NetEase founder and chief executive William Ding said in the release. “However, there were material differences on key terms and we could not reach an agreement.”
NetEase fell as much as 15% in Hong Kong after the announcement, its biggest intraday fall in more than a year, amid a wider selloff among Chinese tech firms.
Growing political tensions between the US and China have made user data a thorny issue. Short-video platform TikTok, run by China's ByteDance Ltd.,
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