At 0:00 on January 24, it is the day when Blizzard game national servers such as "World of Warcraft", "Hearthstone" and "Overwatch" are expected to be suspended. Previously, many domestic gamers still expected NetEase and Blizzard to continue negotiations, and things could turn around. But on January 17, an announcement from Blizzard China completely extinguished the last glimmer of hope in the hearts of players. According to the announcement, Blizzard and NetEase failed to negotiate again not long ago, and its proposal to extend the operation of the game for 6 months was not accepted by NetEase.
In this regard, on the evening of January 17, NetEase issued a statement on the official Weiwei, saying that we believe that Blizzard's proposal - including today's sudden statement - is arbitrary, indecent and not in line with commercial logic. Its excessive self-confidence did not consider this kind of behavior of giving and taking, riding a donkey to find a horse, and divorce without leaving his body, which put players and NetEase in a position.
At this point, the game between NetEase and Blizzard has finally settled.
01
NetEase Blizzard "tears face"
On November 17, 2022, the game company Blizzard suddenly announced that it would end its licensing agreement with NetEase that expired on January 23, 2023: from 0:00 on January 24, all national server games such as World of Warcraft and StarCraft series will cease to operate.
In the late evening of January 17, NetEase responded to the "Blizzard Update Instructions for the Chinese Player Community" previously released by Blizzard China through the official WeChat.
The response showed that for unknown reasons, Blizzard re-approached NetEase last week, putting forward a proposal for a six-month extension of the game service and other conditions, and made it clear that it would not stop continuing negotiations with other potential partners during the contract extension. During the same period, Blizzard's negotiations with other companies were all based on three-year contract periods. Considering the unreciprocity, unfairness and other conditions attached to the cooperation, the two sides were ultimately unable to reach an agreement.
NetEase said Blizzard's proposal — including sudden statements — was arbitrary, unseemly and not commercially logical. Its excessive self-confidence did not consider this kind of behavior of giving and taking, riding a donkey to find a horse, and divorce without leaving his body, which put players and NetEase in a position.
In response to the rumor that "NetEase wants IP control" caused the two sides to "collapse", NetEase said that the news was untrue. NetEase, as an agency, has never sought IP control of Blizzard Games or other partners, and in the course of its long-term cooperation over the past fourteen years, NetEase has used and licensed any Blizzard IP in accordance with the terms of the contract and obtained Blizzard's consent and approval. IP cooperation with other partners is also based on this principle.
After the release of Blizzard's long article, "Blizzard China Posts Again" and "Blizzard Green Tea" have appeared on Weibo hot searches, netizens have said that most of the responsibility for Blizzard's suspension of national service has been pushed to agent NetEase, and it seems that it is the victim party. Today, some netizens revealed that the self-operated café in NetEase Park launched the drink of the same name "Blizzard Green Tea", which seems to imply Blizzard's "green tea" behavior, and the drink has been sold out.
02
Finding new partners is still not going well
Blizzard China said it has held talks with a number of potential partners, and its preferred potential partners are to provide players with high-quality and stable game services, create a positive gaming environment inside and outside the game, and work together to bring the game to Chinese players.
Judging from the information disclosed in the announcement, Blizzard seems to believe that things still have a turnaround. It said that NetEase is not willing to extend the game service for 6 months based on the existing cooperation terms during its search for new partners, so that everyone can continue to play during this period, but it will not give up and will still do its best for players. "I hope everyone understands that the matter is not over, and we will still try to find national service partners who share the same faith."
In fact, as early as the end of last year, when Blizzard announced its separation from NetEase, there was a lot of news in the market about potential takeovers. However, since then, ByteDance, Mihayou, Perfect World, etc. have refuted rumors that the company has no relevant plans. Since then, the takeover also seems to be far away.
Caesars Culture recently said that the company has recently paid attention to the ownership of the operation rights of Blizzard series game products in China, and has not yet communicated with relevant parties. When asked about the matter recently, Dinglong Culture said that the company has no relevant cooperation arrangements. Companies such as 2345 and Zhejiang Digital Culture have also recently made it clear that they have not cooperated with Blizzard in game business.
In 2017, Zhixingtong, a subsidiary of Chinese Media Holdings, announced that it would cooperate with Activision Blizzard to develop the "Call of Duty" IP mobile game, and related game products have also been tested in some countries. However, due to the fact that the performance of the game has not reached the satisfaction of both parties, in June 2019, the two parties terminated the cooperation agreement for the joint development of the game. As for whether to cooperate with Activision Blizzard, Chinese Media previously said that Smart Star will make comprehensive consideration according to its own actual situation, and if there is business cooperation, then the announcement of Smart Star will prevail.
03
Why is it difficult to renew my contract?
Why didn't this renewal go as hoped? From the current situation, it may be related to the fact that the conditions offered by Blizzard are not as good as expected.
Relevant people revealed that Blizzard proposed to extend the cooperation period by 6 months, but its attitude was still tough. "Blizzard wants to find the next home but didn't find it, now come back and let the original match make do for another half a year, NetEase will definitely not be able to accept it." Blizzard's struggle to find the next partner to take over forced him back to the negotiating table. Talking about the breakup drama between Blizzard and NetEase, this market source said that this exposed the arrogance of some traditional game manufacturers for the Chinese market. They may have subconsciously always thought that the Chinese market was insignificant. At present, many internationally renowned game manufacturers do not even have a dedicated company in China to undertake daily work.
04
Net profit and revenue both declined
On November 8, 2022, Activision Blizzard announced its fiscal 2022 third quarter financial report, with net revenue of $1.782 billion in the third quarter of fiscal 2022, a year-on-year decrease of 14%; Net income was US$435 million, down 32% year-over-year, and monthly active users were 368 million, down 5.6% year-over-year.
Although the launch of Diablo: Immortal boosted Activision Blizzard's mobile game business, mobile game revenue reached $932 million, up 14% year-over-year. However, since the beginning of 2022, Activision Blizzard has gone through three earnings seasons, and the year-on-year decline in operating income and net profit has not been reversed.
It is undeniable that Activision Blizzard's well-known IPs such as "Call of Duty", "Diablo", "World of Warcraft" and "Overwatch" have been born for a long time and still have a lot of influence in the game circle. Once the sequel is launched, it can still exert IP influence and drive the return of old fans of the brand. And its Blizzard department has been sitting on the title of "produced by Blizzard, it must be a boutique" all year round.
However, Activision Blizzard also bluntly said that the market decline of Activision's "Call of Duty" series of works has gradually emerged, and the "Warcraft" series of games in the Blizzard department has entered a trough, and the loss of players is relatively serious. Activision Blizzard has also appeared since 2019, and the casual mini-game "Candy Legend" has supported the company's performance, and revenue has crushed these well-known IPs. At the same time, since the release of Overwatch in 2016, no new IP has been born under Activision Blizzard.
Editor-in-charge: Jiang Saisai
Proofreader Zhang Xiaonan
Source: Beijing Business News, Daily Economic News, Shanghai Securities News, Jiupai News