Game over for Warcraft in China, as NetEase and Blizzard end their 14-year deal from January 2023

The Hangzhou-based publishing giant and Activision Blizzard subsidiary failed to agree on an extension to their long-running collaboration, which had brought famed franchises like StarCraft, Diablo, Overwatch and World of Warcraft to Chinese players. Blizzard will suspend most online game services in mainland China from January 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.

Growing political tensions between the US and China have made user data a thorny issue. Short-video platform TikTok, run by China’s ByteDance, has been criticised by American politicians as a national security threat and is having to show a firewall between its US users and any China-based operations.

Originally signed in 2008 and last renewed in 2019, the distribution accord has been fruitful for both companies, feeding NetEase with globally recognised hits and giving Activision a gateway into the world’s biggest PC and mobile gaming arena. China contributed at least 3 per cent of Activision’s net revenue in 2021 and is a significant driver of future growth. It accounted for over US$400 million in esports revenue last year and more than 400 million fans. Blizzard has several competitive gaming organizations, such as the Overwatch League, that include Chinese teams.