Blizzard Entertainment, part of Activision Blizzard, announced that it will be "suspending most Blizzard game services in mainland China due to the expiration of the current licensing agreements with NetEase." The termination of live services is set for January 23, 2023.
Blizzard had partnered with the Chinese company since 2008 on the publication and management of its games in the nation. The deal helped assure that the US-based publisher didn't run afoul of China's strict content guidelines and rules.
Partnerships like this are common in the gaming industry. Riot Games, for example, had a similar agreement with Chinese gaming company Tencent to help it distribute League of Legends there, before Tencent went on to acquire Riot in 2015.
According to Blizzard, when the current agreement expires, nearly every live game it operates will be going offline in China, including World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the StarCraft series, Diablo III, and Heroes of the Storm. The only exception will be mobile game Diablo Immortal, which will continue operating under a separate agreement, NetEase said.
Not only does this announcement obviously have major ramifications for the millions of people currently playing the aforementioned Blizzard games in China, but the fallout from this breakup could also impact major Blizzard ventures like the Overwatch League, which currently has one fifth of its teams based in China.
Blizzard has been vague on the specifics of how it will sunset operations in China, saying only that it will "suspend new sales in the coming days and Chinese players will be receiving details of how this will work soon." The company did note that new releases scheduled for later this year, including World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and season 2 of Overwatch 2 will still go forward in China.
Although players that already purchased those releases won't have long to enjoy them before the looming January 23, 2023 shutdown date, Blizzard did promise that it is "looking for alternatives to bring our games back to players in the future," meaning it does expect to return to China, eventually.
Neither company provided much detail on why negotiations fell apart. Blizzard only said it had failed to reach an agreement "that is consistent with Blizzard's operating principles," while NetEase cited "material difference on key terms" as the culprit.
However, Simon Zhu, President of Global Investment and Partnership at NetEase, published a LinkedIn post stating "One day, when what has happened behind the scene could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make...Feel terrible for players who lived in those worlds."
It would appear, at least in this exec's opinion, that there was much more tension behind the scenes that the corporate boilerplate of each company's respective announcements suggest.