NetEase Declines Blizzard's Contract Extension Offer Amidst Upcoming Game Shutdown In China

As the fate of Blizzard-developed games in China hangs in the balance, NetEase has declined a six-month extension of its publishing agreement with Blizzard, citing unequal and unfair treatment.

It was announced late last year that Blizzard had elected not to renew its deal with NetEase, which for over 14 years has published and localized Blizzard titles for the Chinese market. Should the two companies fail to come to terms and a new publishing partner not be found before January 23, all Blizzard titles in the region, including games like World of Warcraft, Overwatch 2, Hearthstone, and Starcraft II, will see their services shut down on the same date.

That fate is looking more and more likely following the news that Blizzard offered NetEase a six-month deal to further extend their publishing agreement and avoid disruption to Blizzard's services, only for the deal to be declined. The failure between the two parties to come to a deal has prompted a new round of finger-pointing between the two companies.

"It is a pity that NetEase is not willing to extend services of our game for another six months on the basis of existing terms as we look for a new partner," Blizzard China said on a post on Chinese blogging site Weibo (via Reuters).

NetEase has since fired back with a statement of their own, claiming that Blizzard was seeking three-year deals with other companies even as it offered NetEase a six-month deal.

"Considering the unequal, unfair, and other conditions attached to the cooperation, the two parties failed to reach an agreement in the end," a NetEase statement (transcribed via Google Translate) reads. "We believe that Blizzard's proposal--including today's sudden statement--is outrageous, inappropriate, and not in line with business logic."

Shortly after Blizzard and NetEase first announced they would be going their separate ways last year, NetEase president of global investment and partnerships Simon Zhu said there was more to the falling out between the two companies than meets the eye.

"One day, when what has happened behind the scene[s] could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make," Zhu said.

In order to prevent Chinese WoW players from losing decades worth of progress in the MMORPG, Blizzard announced it will roll out a new feature that will allow players to download their characters for safekeeping ahead of the game's upcoming shut down in the region. Warcraft general manager John Hight said "everyone will be able to keep their game history and memory in their own hands," until a new partner in China is found.

Though the falling out between NetEase and Blizzard has been incredibly public, the two companies technically still work together in some capacity. NetEase co-developed Diablo Immortal alongside Blizzard, which according to Activision Blizzard's Q3 2022 financial results, has sat among the top-10 grossing mobile games in China since its July 2022 launch. Development on the free-to-play mobile game will continue thanks to a separate agreement between the two companies. NetEase was reportedly also working on a mobile Warcraft MMO for multiple years, only to have the project canceled when Blizzard and NetEase could not come to financial terms.