Blizzard Entertainment and NetEase will officially conclude their 14-year partnership in January next year. This will result in a loss of income for the Chinese company and the temporary suspension of service for some of the country's most popular games.
Following this, the price of NetEase stock fell dramatically, Bloomberg reported.
Implications
The end of the long-running partnership between US video game holding company Activision Blizzard subsidiary and Hangzhou-based publishing giant NetEase was announced on Wednesday, Nov. 16.
Blizzard revealed that it would be suspending most of its online gaming services in mainland China beginning on Jan. 23. Additionally, video game sales will be halted in the near future.
The US-based company is known for its popular titles, such as StarCraft, Diablo, Overwatch, and World of Warcraft.
According to the press release, Blizzard will temporarily halt game sales and provide instructions to Chinese gamers in the coming days. However, the announcement did not specify when exactly this would happen, said The Verge.
NetEase stated that the development of Diablo Immortal would continue as per the terms of a separate agreement.
Blizzard has added that they will continue with the launches of their next projects later this year. These include the World of Warcraft: Dragonflight expansion and Overwatch: Season 2.
Core Issues
People familiar with the negotiations have indicated that the ownership of intellectual property and the custody of the data of millions of gamers throughout China were the core issues in the NetEase extension talks and that these issues were more debated than the financial conditions.
NetEase said in a separate statement that the affected games contributed only a small portion of the company's overall revenue and profit.
William Ding, founder, and CEO of NetEase stated in a press statement that the company has worked hard to negotiate with Activision Blizzard in order to keep working together and continue serving the many loyal gamers in China. "However, there were material differences on key terms and we could not reach an agreement," he continued.
It does not sound like the separation was settled amicably. As it turns out, TechCrunch spotted a bitter post on LinkedIn by Simon Zhu, head of global investment and partnership at NetEase Games.
It stated, "One day, when what has happened behind the scene could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make. Feel terrible for players who lived in those worlds."
After the news, shares of NetEase plunged as much as 15% in Hong Kong, the greatest intraday drop in more than a year, as part of a broader selloff among Chinese technology businesses.
"User Data"
User data has become a contentious topic due to rising political tensions between the US and China.
TikTok, a short-video platform operated by China's ByteDance, has been condemned by American legislators as a national security danger, prompting the company to demonstrate a firewall between its US users and any China-based activities.
Read Also: NetEase, a Chinese Gaming Compay, Has Launched its Gaming Studio in the US Called Jackalope Games
This article is owned by Tech Times
Written by Trisha Kae Andrada
