Blizzard’s presence in China smells scorched. This risks losing a large market share to the publisher. Explanations.
Blizzard has been present in China since 2008 through a major collaboration with the Chinese internet giant NetEase. For the moment, the current contract is valid until January 2023. But Blizzard has indicated that the two groups have not reached an agreement. Blizzard explains as follows:
We will suspend sales in the coming days, and Chinese players will receive detailed information soon.
Bad weather for Blizzard?
NetEase has confirmed that several Blizzard titles will not be renewed, namely World of Warcraft, Starcraft, etc. As a result, NetEase stock fell more than 9% on Thursday’s close on the Hong Kong Stock Exchange. But it may be Blizzard that has a lot to lose in the story as well. Indeed, according to the latest financial reports, Asia alone accounts for 16% of the group’s turnover. And China in the lot must represent a good half if not more of that percentage. To deprive oneself of China is also to draw a line under several million potential users/buyers. A very significant shortfall which should reduce the turnover of the American publisher if it continues.
Blizzard will therefore have to find a new partner to distribute its games, it remains to be seen who it will be. Maybe Tencent, which is already Activision’s distributor in China? Because yes, remember that only a company under Chinese law can operate online games in the country. Which pretty much limits the options.