Microsoft, NetEase to re-launch Warcraft and other games in China (updated)

NetEase

10/04/2024 06:06

(Adds stock movement, analyst comments)
    By Josh Ye
       HONG KONG, April 10 (Reuters) - China's NetEase
 9999.HK  and U.S. games peer Microsoft  MSFT.O  said on
Wednesday they will bring popular titles including "World of
Warcraft" back to China after a fallout involving the developer
that ended an almost 15-year partnership.
    The pair said they are working to bring online games from
Blizzard Entertainment, a subsidiary of Activision Blizzard
which Microsoft bought last year, back to the world's
second-largest economy, starting this summer. NetEase was the
publisher of Blizzard games in China from 2008 to 2023.
    "We at Blizzard are thrilled to reestablish our partnership
with NetEase and to work together, with deep appreciation for
the collaboration between our teams, to deliver legendary gaming
experiences to players in China," said Blizzard Entertainment
President Johanna Faries in a joint statement.
    NetEase and Microsoft also said they have agreed to explore
bringing NetEase titles to Microsoft's Xbox and other gaming
platforms.
    This "might be more consequential in the long run for
NetEase as it is aspiring to increase its overseas exposure,"
said Nomura head of China internet equity research Jialong Shi.
    NetEase's share price rose about 2% in Wednesday morning
trade, adding to an around 3% gain on Tuesday fuelled by news of
the impending announcement from China's second-largest video
games company by revenue after Tencent  0700.HK .
    A number of Blizzard's games were taken offline in China in
January 2023 after the developer terminated the partnership with
NetEase citing disagreement over intellectual property control.
The pair subsequently sued each other.
    Tension eased after Microsoft's October acquisition of
Activision Blizzard, which was followed by management changes.
Chinese media then reported that Microsoft and NetEase were
seeking ways to re-launch Blizzard games in China.
    The renewed publishing agreement covers Blizzard's flagship
games "World of Warcraft" and "Hearthstone" as well as other
titles in the "Warcraft", "Overwatch", "Diablo" and "StarCraft"
franchises, Wednesday's statement showed.
    "We have always expected NetEase will regain distribution
rights of Blizzard's games, and the reengagement translates to
about 2% incremental earnings for NetEase," said Morningstar
analyst Ivan Su.
    Blizzard games were popular in China, with local media
estimating Chinese players of "World of Warcraft" alone at
around five million in 2009 after NetEase became the publisher.
    The breakup sparked outcry with Chinese netizens bemoaning
lost access to favourite games. Over a million users requested
refunds for unspent in-game credit, NetEase customer service
said shortly after the games were taken offline.

 (Reporting by Josh Ye; Editing by Christopher Cushing)
 ((Josh.Ye@thomsonreuters.com;))