For 14 years, Blizzard has published its online games like WoW, Overwatch, Hearthstone, or Diablo 3 in China. For this, it entered into a partnership with the Chinese partner NetEase. In January 2023, this partnership broke apart and the servers of Blizzard’s games closed – much to the dismay of Chinese fans. Now, NetEase wants to see some money, and not just a little.
Update April 25, 2:30 PM: As WoWHead reports, there seems to be a misunderstanding regarding the lawsuit. Even the submissions to the court were apparently erroneous and have now been corrected:
- While the lawsuit against Blizzard was indeed filed as reported (and as we at MeinMMO reported in the following article), the plaintiff is not the Chinese ex-partner NetEase, but a private individual named Yang Jun.
- Yang Jun himself filed a lawsuit against NetEase in 2019 over game time in WoW.
- It is now believed that the court documents got mixed up somehow, making it seem as though NetEase had filed the lawsuit. This is what the Chinese source and western media referred to. However, how this error occurred in the court submissions is unclear.
The original report from April 24 (not adjusted):
This is the background of the lawsuit: To do business in China as a western company, you must enter into a partnership with a Chinese company. For Blizzard, that was NetEase for 14 years. Through the partnership, they generated $750 million in revenue annually.
However, negotiations over an extension of the long-term contract reportedly fell apart in 2021, according to insider reports, leading to an ugly, public separation. While Blizzard appeared cool, NetEase literally went crazy and smashed an Orc statue.
Now, the divorce has consequences.
What kind of lawsuit is this? The Chinese site Sina.com reported on the lawsuit on the afternoon of April 24:
- NetEase filed the lawsuit in Shanghai and accused Blizzard of violating a number of licensing agreements.
- As compensation, they demand 300 million Chinese Yuan, which is about 43.448 million Euros.
Blizzard is said to have outstanding bills in China
What accusations does Blizzard face? Among other things, it is said that Blizzard promised Chinese players to refund their money when the Chinese servers go offline. NetEase assumed this obligation for 1.12 million players and now wants compensation for it. Blizzard has refused to pay NetEase the “commission” for the national servers amounting to almost 13.15 million Euros.
Furthermore, NetEase wants money for “unsold merchandise.”
And there is talk of a “clause” under which NetEase had transferred large sums in advance for “multiple games.” Blizzard is said to have not reimbursed the money, although the promised games did not emerge.
What is going on? We have reported on MeinMMO several times about the separation of Blizzard and NetEase. NetEase was apparently extremely angry about how the separation occurred. They even destroyed an Orc statue from Blizzard.
About a few weeks ago there was a report stating that the separation was due to a misunderstanding:
- In 2021, there were apparently misunderstandings during negotiations to extend the deal.
- NetEase wanted to redesign the partnership and demanded more rights to appease the Chinese government, which looks suspiciously at such deals.
- Blizzard, on the other hand, wanted better terms for itself, which NetEase found outrageous. The Chinese side refers to a report from the New York Times and speaks of a one-time payment of $500 million that Blizzard allegedly demanded in order to extend the contract.
Ultimately, it is said that NetEase said something that Activision Blizzard interpreted as a threat that NetEase could influence the Chinese government to protest against Microsoft’s acquisition of Activision Blizzard.
However, NetEase did not see this as a threat, but considered its own trust as accommodating.
After the alleged threat, negotiations collapsed and many tens of thousands of WoW players lost their virtual home in China.
In any case, it seems that the already dirty separation is now deteriorating further.
WoW: 100,000 players lose their beloved MMORPG – report reveals background to Blizzard’s failure
