Blizzard Entertainment has announced that it will suspend game services and new sales in China starting January 2023.
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As announced Nov. 17 via Activision Blizzard’s investor relations website, the once-beloved studio “will suspend most gaming services in mainland China due to the expiration of current licensing agreements with NetEase, Inc. on January 23, 2023”.
“That includes World of Warcraft, Hearth stone, Warcraft III: Reforged, Overwatchthe Spaceship series, Devil IIIAnd Heroes of the Storm,clarifies the company statement.
Incidentally Immortal devilBlizzard noted that “the co-development and publication of the mobile title is covered under a separate agreement between the two companies.”
“Blizzard Entertainment has had licensing agreements with NetEase since 2008, covering the publication of these Blizzard titles in China,” they continued. “The two sides have not reached an agreement to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees, and the agreements will expire in January 2023.”
Therefore, Blizzard has confirmed that “it will suspend new sales in the coming days and Chinese players will soon receive details on how it will work”.
However, the company also pointed out that the “upcoming releases for World of Warcraft: Dragon Flight, Hearthstone: March of the Lich Kingand the second season of Surveillance 2 will proceed by the end of the year.
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“We are immensely grateful for the passion our Chinese community has shown during the nearly 20 years that we have brought our games to China through NetEase and other partners,” Blizzard President Mike Ybarra said in conclusion of the announcement. “Their enthusiasm and creativity inspire us and we are looking for alternatives to bring our games back to gamers in the future.”
A surprising announcement, this decision means that Activision Blizzard’s next new owner, Microsoft, will lose a supposed gold mine of untapped gamers.
And while this situation may seem financially dire on the surface, the loss of the Chinese gaming market may not be as devastating as some might assume.
According to an October 2022 report by market analyst firm Niko Partners, China is currently expected to spend an estimated $45.44 billion on video game software and services.
While this number might sound impressive, according to Niko Partners, it actually represents a -2.5% decline in revenue year-over-year, or put another way, “the first decline in 20 years that Niko has tracked the Chinese video game market.” “.
This decline, Niko Partners said, was “due to lower spending on mobile gaming partially offset by growth in PC and console gaming” as well as “downward macroeconomic factors, restrictive regulations, lack of new licenses and underperformance of the newly launched titles “
“The Chinese economy, the Zero COVID policy, the impact of young gamer regulations, and the lack of new ISBN licenses for games have all contributed to the adverse changes in the domestic gaming market,” said the company’s president and founder , Lisa Hanson.
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However, Hanson also noted that his company currently “expects a recovery and a compound annual growth rate of 2.6% from 2021 to 2026 based on anticipation of new games growing portfolios of legacy titles and adjustments in industry stakeholders in youth legislation
However, this move is sure to be a major blow to Blizzard, who have been actively investing in expanding their presence within Red Dragon in recent years, to the detriment of players at home.
In 2019, during the Hearth stone World Cup, Chung “Blitzchung” Ng Wai mentioned Hong Kong’s free movement in his post-match interview.
He was then stripped of his winnings and banned from participating in any future tournaments.
This led to near-universal backlash from not only gamers but also a bipartisan selection of U.S. Senators, to the point where then-Blizzard chairman J. Allen Brack eventually issued a non-apology for “moving too fast on the matter at BlizzCon. 2019.
Furthermore, until the company was sold to Microsoft in 2022, Activision Blizzard was owned in part – 5% to be exact – by the infamous Chinese media conglomerate Tencent.
At the time of writing, it’s unclear whether Blizzard’s games will return to China under a different license, or if ending their deal with NetEase will truly spell the end of their ambitions within the communist country.
Whichever way the wind blows, it’s clear that, in the spirit of the Lunar New Year themed skins included in their many games, Blizzard is going to have a very difficult (return) journey to the West.
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