On Thursday, November 17, gaming giant Blizzard Entertainment announced that it would cease operations in China. Its licensing agreement with Chinese tech giant NetEase is drawing to a close in January 2023.

As a result, all of Blizzard’s games, including big hits such as World of Warcraft and Diablo III, along with the two co-developed titles Diablo Immortal and Heroes of the Storm, will no longer be available for players in the country.

The licensing agreement was first stipulated in 2008, but according to Blizzard’s announcement, it will not be renewed because “the two parties have not reached a deal to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees.”

Following the announcement, NetEase stocks plummeted by 14% in just a few hours, according to the Chinese online publication The Paper.

During a quarterly earnings conference call the day after, NetEase CEO Ding Lei made it publicly known that the company had worked hard to reach an agreement with Blizzard, but the negotiation proved to be more difficult than expected. However, some of Blizzard’s terms, especially “concerning sustainable operations and the core interests of Chinese players,” were unacceptable to them.

The news immediately made its rounds on Chinese social media, and a related hashtag has gained more than 160 million views on Weibo, China’s top microblogging platform.

Many users have shed digital tears over the pending withdrawal of their favorite games, while others have wondered whether competitors such as Tencent and miHoyo (Genshin Impact’s developer) will seize the opportunity to take over the distribution rights.

Tencent and miHoyo have dismissed the speculation as rumors and have denied engaging in any talks with Blizzard.

Earlier this year, Blizzard found itself in hot water before the release of its latest title Diablo Immortal. Initially scheduled for a June release, its debut was postponed allegedly due to politically sensitive content posted by the development team on Weibo.

Blizzard’s president Mike Ybarra said that the company would seek out alternative solutions to continue distributing the titles in China. The statement does not come as a surprise, as China is currently home to the biggest gaming market in the world, generating billions of dollars each year.

However, the Chinese gaming industry has stagnated in the past year due to various factors, ranging from restrictive policies to market saturation.

In August 2021, China’s General Administration of Press and Publication issued a nine-month ban that froze the release of new titles in China while announcing new rules that limit minors’ gaming time online.

Cover image via Wikimedia Commons