21st Century Business Herald reporters Cai Shuyue, Wu Liyang, intern Wang Haiqing, Shanghai report
On January 24, 2023, Blizzard Entertainment officially ended its 15-year cooperation with NetEase and suspended the operation of many games such as World of Warcraft in Chinese mainland, and after 442 days, Blizzard finally returned to the table in the domestic game market. It's just that this time the next home is still NetEase.
On April 10, NetEase, Microsoft Games, and Blizzard Entertainment jointly announced that Blizzard Entertainment and NetEase have reached an updated game publishing agreement based on their more than 15 years of cooperation to bring Blizzard games back to Chinese players.
The accompanying picture issued with the announcement is a group photo of Ding Lei, CEO and chairman of NetEase, Johanna Faries, president of Blizzard Entertainment, and Phil Spencer, CEO of Microsoft Games. In addition, Blizzard also mentioned that the return of Blizzard's games will be in the summer of 2024, and Microsoft Games has formed a strategic partnership with NetEase and tried to bring NetEase's new games to Xbox consoles and other platforms.
However, time has passed, and Blizzard, which has returned to the table, has not had the same appeal and boost to the market as before. On the afternoon of April 10, A-share game concept stocks continued to decline, and only a few game stocks in Hong Kong reported gains. At the close, NetEase-S (9999.HK) rose 0.83 to HK$158.8.
A sell-side analyst analyzed to 21 reporters that judging from today's market performance, A-shares and Hong Kong game stocks are weak as a whole, and they are obviously not driven by the news of Blizzard's return to the national server. The analyst believes that on the news side, the glacier network (300533. SZ) disclosed its 2024 Q1 financial report today, and the company's net loss attributable to the parent company was 367 million yuan to 523 million yuan, a significant decrease of 291.89% to 373.46% year-on-year. Affected by the news, the company's stock price fell by more than 18%, and this event led to the overall sentiment of gaming stocks today.
The return that was "spoiled" in advance
Since Blizzard temporarily withdrew from the domestic market with a number of products, when the American game giant will return has become a highly concerned agenda for the entire industry. In fact, the day before NetEase Blizzard announced the resumption of cooperation, there were already "spoilers" from many sources, and even directly posted a photo of Ding Lei and Johanna Farie discussing important matters at the San Francisco GDC, and directly pointed out that April 10 is the "official announcement date" finalized by the two parties.
And Blizzard's return to the national server is undoubtedly good news for players. "In any case, on the day of the official opening of the Blizzard game national server, I will definitely log in to the game as soon as possible. Fantuan (pseudonym) is an avid Overwatch player, and after seeing the news of Blizzard's official return, she excitedly told the 21st Century Business Herald reporter.
Although there is still a certain amount of time before the official announcement mentions the "summer return", many players have paid attention to the user data and game records that were previously sealed by NetEase and Blizzard in addition to celebrating.
On the same day as the official announcement of the return, Blizzard Entertainment and NetEase Game Publishing Team released the "Letter to Blizzard Game National Server Players", which mentioned that although the agreement between NetEase and Blizzard has been re-signed, the two sides still need a short time to make technical preparations for the opening of the server, such as rebuilding a new server room and restoring all kinds of data.
"When the server is on, we will ensure that your account data is kept intact. Don't listen to rumors and engage in unprotected accounts or account data transactions. The above-mentioned publishing team said.
Before the termination of the cooperation, the agency operation of Blizzard's game products in Chinese mainland was handled by Shanghai NetEase Network Technology Development Co., Ltd., jointly established by NetEase and Blizzard. Before the server is shut down in January 2023, NetEase also issued a document stating that after the game server is closed, all account data and character information in each game (including but not limited to characters, remaining game time, game props, materials, recharge information, etc.) game data will be sealed.
In response to the data recovery problem after Blizzard's return to the national server, the person in charge of the data center of a game company analyzed to 21 reporters that in the context of the official data being properly sealed, users do not have to worry too much about the possible loss of their account information and game progress. "As mentioned in the official statement, it will take some time to recover the data, but it is likely that the data interface will be reset and the relevant tests will be carried out. If it is efficient, it can be completed within a month. He said.
It is worth mentioning that the reporter noticed that after the announcement of the return, the WeChat public account of "NetEase Recruitment" immediately published a recruitment notice to recruit troops for Blizzard's national server operation, and the open positions include game operation and maintenance development engineers, senior data analysts, operation planning, etc.
442 days of parting ways
Looking back on the whole process of business cooperation between Blizzard and NetEase in recent years, it can be described as twists and turns, the sharp contradictions between developers and publishers have inevitably hurt the interests and feelings of players in the virtual world, and the friction between giants has also become the focus of attention in the industry.
Turning the time back to November 17, 2022, Blizzard Entertainment announced that due to the expiration of the current license agreement with NetEase on January 23, 2023, NetEase will suspend the operation of a total of 7 products such as "World of Warcraft" and "Hearthstone". The "breakup" drama between the two has officially kicked off, and the unilateral announcement of the suspension of cooperation before the deadline is also once seen as Blizzard's move to put pressure on NetEase in the contract renewal negotiations.
The termination of the cooperation with NetEase means that Blizzard needs to quickly find the next domestic partner company to resume the operation of its games as soon as possible. But judging by the results, Blizzard's search for other homes has not been smooth.
On January 17 of the following year, Blizzard China posted on Weibo that it had approached NetEase to extend the existing agreement for six months, with the intention of buying more time for players and allowing Blizzard to "continue to explore a reasonable and long-term development path in the national server region in the future", but NetEase did not accept the proposal.
Six days later, on the day the agreement officially expired, NetEase issued a farewell letter to Blizzard players, promising to arrange refunds for related products, and officially terminate all operations of 7 products including World of Warcraft in the Chinese mainland market at 0:00 the next day. At the same time, Blizzard also shut down the Battle.net login and all game servers, and closed client downloads, ending the 15-year cooperation.
And just three months after the "breakup", NetEase and Blizzard went to court over arrears.
In April 2023, Shanghai NetEase Network Technology Development Co., Ltd. filed a lawsuit in Shanghai against Blizzard Entertainment Co., Ltd. for violating a series of license agreements, demanding a refund of 300 million yuan in arrears. NetEase said that Blizzard refused to assume the obligation to refund players in the national server, and refused to pay the prepaid commission fees related to the refund of the national server to NetEase, involving an amount of nearly 100 million yuan. This lawsuit also pushed the "divorce" tug-of-war between the two parties to a new climax. Since then, although there have been rumors that other domestic game companies have been in contact with Blizzard, there has never been any real news.
After many rounds of tugging with public opinion and law, the turning point for the two sides to "reunite" appeared at the end of last year. On October 13, with the official approval of the UK Market and Competition Authority, Microsoft's acquisition of Activision Blizzard of the century was launched, and the intervention of new stakeholders brought the two sides back to the negotiating table.
What role does Microsoft play in the game?
For NetEase and Blizzard, it is difficult to separate from each other, and it is not easy to reunite after breaking the mirror. The reason for this lies in the already irreconcilable contradictions between game developers and local agents.
Previously, according to media reports, the main reason for NetEase and Blizzard to terminate their cooperation was that the renewal conditions were "not negotiated". Blizzard proposed a higher share ratio than before, and asked NetEase to develop other IP mobile games under Blizzard, but only got a share in China. And in the process of research and development, NetEase needs to pay a huge deposit to ensure the progress of research and development, otherwise it will be "fined".
In the previous cooperation between Blizzard and NetEase, Blizzard preferred to regard NetEase as the downstream of its industrial chain, hoping to earn more benefits from the latter. Therefore, during the renegotiation, many 'overlord clauses' were proposed to NetEase. Sun Jiashan, an associate researcher at the Central Academy of Culture and Tourism Management, pointed out to reporters.
At this time, Microsoft, which entered the game, has undoubtedly become an opportunity for the two sides to rebuild the old friendship and the "lubricant" of the cooperative relationship. In the return statement jointly released by NetEase and Blizzard Entertainment, it was mentioned that in addition to resuming the operation of games such as "World of Warcraft" in the national server, Microsoft, as Blizzard's parent company, also threw an olive branch to NetEase - in the future, more NetEase's games will be released through Microsoft's Xbox and other channels.
Judging from the various measures taken by Microsoft after taking over Blizzard, compared with the previous chaotic state, Blizzard's operations have returned to the right track to a certain extent.
"Microsoft's business for Activision Blizzard is generally oriented to three levels: first, the stable operation of old games, including the return of the original Activision Blizzard's core technical personnel, second, the research and operation of new games with old IPs, so that Blizzard can return to the era of 'Blizzard's production, must be a high-quality product', and third, the promotion of joint research and development. Zhang Shule told reporters that Blizzard's product matrix is complete, production capacity is still there, and the main task at present is to further explore mobile games and other increments on the basis of stabilizing the existing business.
Under such a management policy, the resumption of cooperation with NetEase is obviously in line with Microsoft's development layout - the former not only has rich experience in mobile game research and development, but also has more than ten years of experience as a Blizzard game agent to ensure that it can resume the operation of Blizzard's national server as soon as possible.
Therefore, there are many opinions that after the NetEase Blizzard reunion, the respective identities of the two sides at the table have been completely converted. Sun Jiashan pointed out to reporters that based on the current node, NetEase and Microsoft are the real protagonists of this negotiation, and Blizzard has become a bargaining chip in the negotiation. The reunion of the two parties is not only a cooperation between multinational game companies, but also means that the international game industry chain is accelerating and deeply integrated.
In January, Microsoft, which completed the acquisition of Activision Blizzard, carried out a round of structural layoffs in its game division, and Activision Blizzard's top management underwent a round of "big changes", including Blizzard President Mike Ybarra and Blizzard Chief Design Officer Allen Adham.
He believes that after Microsoft took the initiative to see Blizzard and became a real talker, the current new cooperation model between NetEase and Blizzard will be more than just a simple game intermodal share. As mentioned in the official announcement, Microsoft not only hopes to continue to develop the Chinese market with the help of Blizzard, but also looks at NetEase's strength as a CP (Content Provider). Therefore, providing channels such as Xbox for NetEase is not only to show its sincerity and strength, but also to integrate software and hardware resources at a deeper level. Sun Jiashan said.
After returning to the national server, how should Blizzard make up for the lost year?
As the leading game manufacturers in China and the United States, NetEase and Blizzard often play the role of leaders in advantageous fields. In the cooperation between the two sides, in the early years, "World of Warcraft" and "Hearthstone" dominated the domestic market rankings of their respective categories all year round, becoming a model of high-quality cooperation between major foreign game manufacturers and domestic agents.
However, the suspension of operations for more than a year since the beginning of 2023, in addition to the direct loss of market revenue, has undoubtedly missed many key nodes in market development for both NetEase and Blizzard.
In terms of industry development, as the first Asian Games to include e-sports in the official program, the Hangzhou Asian Games canceled the "Hearthstone" project in March last year on the grounds that "there are no preconditions", making Blizzard completely miss the "e-sports boom".
In terms of competing products, during the shutdown of Blizzard's national server, other e-sports games such as Tencent's Riot Games' Valorant and Genting Game accelerated the pace of the tournament system: in May 2023, after the successful holding of the "Genting Game" Global Finals, Tencent Interactive Entertainment announced the upgrade plan of the Genting Game event, announcing the establishment of the Genting E-sports points system and the addition of international events, and in July, the "Valorant" national server was officially launched, and the Global Championship CN Regional Qualifying Tournament was held in Shanghai.
"On the e-sports track, Valorant and Genting Game are basically benchmarked against Blizzard's Overwatch and Hearthstone. A senior e-sports practitioner based in Beijing said in an exchange with a reporter from Southern Finance and Economics.
Previously, the Chinese Overwatch Challenger Series and Hearthstone Gold Open were both co-hosted by Blizzard and NetEase CC, and after the two sides parted ways, the related events were also suspended.
In the e-sports industry, the loss of the local regional server for the development of the game means the loss of the fundamental development soil, and last year is also regarded as the "most difficult year" for the Chinese team to compete in the Overwatch World Cup. In this context, the 2023 Chinese team "Overwatch" World Cup overcame all difficulties to reach the final, and finally lost to the Saudi Arabian team 2:3 and was relegated to the runner-up.
But lost time is not entirely irreparable. Back to the product itself, Blizzard's game updates in 2023 include the new "Diablo 4", the new expansion pack "Battle for the Badlands" of Hearthstone, the new hero Maoga of "Overwatch 2", etc., and "World of Warcraft" has undergone 5 version updates, becoming the most popular MMO online game in 2023, and its 10.0 expansion has created the highest user retention rate in recent years.
After being officially acquired by Microsoft, Blizzard seems to have regained its former demeanor as the world's top developer. It is foreseeable that once the national server resumes operation, high-quality and large-scale updated content in the short term will become an excellent bargaining chip for NetEase and Blizzard to win back old users and even attract new players.
On the other hand, under the huge volume of Blizzard's return, the reboot of the national server has its own topicality. When the reporter checked the homepage of NetEase's game community "NetEase God", he found that "World of Warcraft" has ranked first at the entrance of the game community. As of press time, more than 730,000 players have pre-ordered the game in NetEase Dashen.
"For me personally, after the reopening of the national server, I will definitely return to the pit, as long as NetEase can at least maintain the operating level before the suspension of the service, I am willing to continue to play. A seven-year veteran player of Hearthstone told reporters.
The past is gone, and the future can be chased. Just like the night when NetEase's World of Warcraft server officially opened 15 years ago, the new story script will be revealed this summer as a result of the anticipation of the majority of Chinese fans, whether NetEase and Blizzard can catch up after losing a year.
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