Microsoft lost 12% of its profit

Blizzard Strikes New Game Distribution Deal with NetEase

Microsoft Corp.’s game maker Blizzard Entertainment Inc. struck a new deal with Chinese video game giant NetEase Inc. on Wednesday, allowing the return of some of Blizzard’s popular titles in the world’s second-largest economy.

The two firms stated that they aim to relaunch games from the Activision Blizzard Inc. subsidiary in China starting this summer, with more information to be revealed at a later date.

Hangzhou-based NetEase became the primary publisher for Blizzard’s games in China from 2008 to 2023. However, the long-time partnership collapsed in January of last year after the two parties were unable to reach an extension deal, leading NetEase’s Hong Kong-listed shares to fall 15%.

Ending a Feud and Reviving a 14-Year Relationship

With the agreement renewed, video game players and enthusiasts in China can expect well-known franchises such as “World of Warcraft”, “Overwatch”, “Diablo”, “StarCraft”, and “Hearthstone” to be available to them once again.

The Chinese gaming market, the world’s largest, is crucial to Blizzard, which has been having some difficulties with its North American markets amid the increased criticism over its management of the Diablo and Overwatch franchises.

Blizzard withdrew several of its biggest titles from China in 2023 after it ended its 14-year collaboration with NetEase due to the two failing to see eye to eye on intellectual property control.

The disagreement turned into a public fight between the video game publishers, which both took legal action against each other.

Hopes for the feud to be resolved came about following Microsoft’s $69-billion acquisition of Activision Blizzard in October, which resulted in an overhaul of the Santa Monica-based company’s management.

NetEase and the US tech giant late last year were reportedly working to settle the issue and resume distributing Blizzard games in China.

Pulling out titles developed by the Activision subsidiary was significant, as Blizzard’s online games were widely popular in the country.

Chinese media reported that the company’s massive multiplayer roleplaying game, World of Warcraft, gained 5 million local players in 2009 after NetEase secured the publishing rights.

Reviving the partnership may also be seen as a move from Microsoft to further its involvement in the largest PC and mobile gaming space globally.

Established in 2008 and renewed in 2019, the game distribution deal between Blizzard and NetEase was favorable for both firms.

China’s no. 2 video game company by revenue was able to access internationally known titles, while the agreement allowed Blizzard to enter the country’s PC gaming-dominated market.

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