Blizzard is suspending all game services in China

Owing to a lack of a resolution over the licensing of World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch 2, the StarCraft series, Diablo III and Heroes of the Storm with NetEase, Blizzard Entertainment will be suspending these titles' services in China in January 2023.

While gaming is a lucrative sector in China, reporting a total revenue of almost $22 billion in July, it is subject to a large number of sanctions. Those under the age of 18 years old are only allowed three hours of gaming per week, and the government did not greenlight any new licenses for monetisable games for 10 months between 2021 and 2022. There is also a limit on the amount that children and young people can spend in a game, and all of these measures are aimed to avoid addiction to video games.

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"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. However, there were material differences on key terms and we could not reach an agreement," stated William Ding, CEO of NetEase, in a press release.

Sales of these games in the country will cease in the next couple of days, however, upcoming launches for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King and the second season of Overwatch 2 won't be affected. Furthermore, the collaboration between the two companies for Diablo Immortal will still stand as it is covered in a separate long-term agreement.

President of Blizzard Entertainment Mike Ybarra thanked the Chinese community for their passion for the games in its portfolio and expressed that the company would be considering other options to bring the games back. It is interesting to note though that this loss will have "no material impact on NetEase's financial results" according to Investing News as the net revenues and net income contribution from these games is in the "low single digits" for NetEase.

Topics: World News, Blizzard Entertainment