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In brief: Gamers in mainland China will soon be dealt another blow after Blizzard said it plans to suspend some of its biggest titles in the country after it failed to renew licensing agreements with partner NetEase.
It was those agreements with NetEase that have enabled Blizzard to publish its games in mainland China since 2008. But the company has announced that they will expire on January 23, 2023, and the two parties have been unable to reach a deal to renew the license. Blizzard said it could not come to an agreement consistent with its "operating principles and commitments to players and employees."
Blizzard said in its press release that it would suspend the sale of its games in China in the coming days, with most online game services in the country suspended from January 23. It named World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the StarCraft series, Diablo III, and Heroes of the Storm, which are very popular in China, as those affected. However, the company added that upcoming releases for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and season 2 of Overwatch 2 would proceed later this year.
NetEase said that the development of Diablo Immortal would continue as it was co-developed by Chinese company Tencent and is covered by a separate licensing agreement. The Chinese firm added that the games represented a low-single-digit percentage of its total revenue and profit. China contributed at least 3% of Activision's net revenue in 2022.
Bloomberg writes that it wasn't just financial terms scuppering the deal. It was also the ownership of intellectual property and control of the data of millions of players across China—the latter being a point of contention in light of rising tensions between the US and China.
Despite the popularity of video/mobile games in China, they face intense government scrutiny. A pause on granting licenses for games that lasted over nine months only ended in April, and China has rules prohibiting under-18s from playing online games for more than three hours each week.