As reported by Chinese media conglomerate Sina Technology, the long-time publishing partner is suing Activision Blizzard over a violation of licensing agreements – demanding compensation for refunds to players, as well as unsold merchandise inventory and deposits on undeveloped games. The suit also includes what NetEase is calling several “unequal provisions favoring Blizzard Entertainment” in the licensing agreements between the two companies, presumably referring to bet-on agreements and large sum deposits by NetEase in order to insulate Activision Blizzard from risk.
It is reported that the primary reason for NetEase to sue Blizzard is because Blizzard refused to assume the obligation of refunding players in the CN service and refused to pay NetEase the prepaid commission fee related to the CN service refund, involving an amount of nearly 100 million RMB. Since January 24, “World of Warcraft”, “Hearthstone Legend”, “Overwatch” and other Blizzard games service shutdown in CN, in order to maximize the protection of CN player’s rights, NetEase already paid in full of more than 1.12 million players related to the refund applications for Blizzard games in CN.
In addition, the lawsuit involves the “one-side clause” signed between Blizzard and NetEase, including the requirement that NetEase deliver a huge deposit for several games in advance, while Blizzard did not refund the relevant deposit when the relevant games were not developed.
The 14-year partnership came to a sudden end last January, after negotiations to renew their long-term licensing agreement broke down, resulting in the cessation of all Blizzard games and services in the region. A lengthy back-and-forth followed the announcement, as Activision appeared to downplay the impact in their quarterly financial reports, while NetEase promised refunds and pledged to continue negotiations on behalf of their players. Shortly thereafter, Warcraft General Manager John Hight announced plans to freeze Chinese player data while the company secured a new publishing partner. Doing so on a short noticed seems to have proved difficult however, as Blizzard returned to NetEase with a six-month extension offer just one week before the expected shutdown of services. The offer was swiftly turned down though, with NetEase referring to it as “living together while divorced,” responding by clearing out its Blizzard offices and livestreaming the destruction of its Gorehowl statue while handing out Blizzard Green Tea – a thinly veiled insult implying their former partners were manipulative and untrustworthy.
Since services officially went offline on January 23rd, millions of Chinese players across Warcraft, Diablo, Hearthstone, Overwatch, StarCraft, and Heroes of the Storm have lost access to their former accounts. While some have opted to migrate to other regions, creating conflict with their original playerbase, others will merely have to wait to see if direct service will ever be restored.
