Warcraft will return to China, the world's biggest video game market, as Microsoft-owned Blizzard and NetEase make up after a year-long feud

NetEase Inc. reached a new agreement to distribute games in China for Microsoft Corp.’s Blizzard Entertainment, salvaging a 15-year relationship and reviving titles like World of Warcraft for the world’s biggest gaming market.

With the deal, famed franchises like StarCraftDiablo, Hearthstone and Overwatch will once again be live for players in China. The Hangzhou-based publishing giant and Microsoft’s Activision Blizzard subsidiary halted a longtime partnership in January of last year after failing to agree on an extension, causing a 15% plunge in NetEase shares in Hong Kong.

Separately, Microsoft’s gaming division and NetEase have agreed to explore bringing new NetEase titles to Xbox consoles and other platforms, the companies said in a statement.

NetEase shares gained as much as 2.4% in Hong Kong on Wednesday, after rising 4.1% a day earlier on speculation about the return of Blizzard’s games.

“We are thrilled to embark on the next chapter, built on trust and mutual respect, to serve our users in this unique community that we’ve built together,” NetEase Chief Executive Officer William Ding said in the statement. The expiration of the previous deal descended into acrimony when the two sides alleged bad-faith negotiations for a renewal of the terms.

Blizzard suspended most online game services and sales in mainland China when the prior pact expired more than a year ago, cutting off a lucrative collaboration for both parties. Its major release in June 2023—Diablo IV, which got off to a hot start internationally—hasn’t been officially available in China. The companies now say Blizzard games “will return to the market sequentially” starting in the summer, with further details to be provided at a later date.

In a letter to Chinese players on Weibo, the two companies said they need time to restart services and solve technical issues including restructuring server rooms and restoring various type of data. Account progress will be preserved when the servers are available, they said.

When the servers were shut last January, NetEase smashed to pieces the giant statue of World of Warcraft’s legendary Gorehowl axe in its Hangzhou campus, and live-streamed the demolition. Now, the two companies are building a new sculpture of the weapon symbolizing their partnership and have promised fans they’ll work closely together. 

Activision Blizzard was acquired in October by Microsoft in a $69 billion deal that set a record for takeovers in the video-game industry. The combined entity ranks No. 3 among global games publishers, behind Tencent Holdings Ltd. and Sony Group Corp., and was expected to seek a rapprochement with NetEase.

First signed in 2008 and renewed in 2019, the NetEase-Blizzard distribution accord has benefited both companies, feeding NetEase with globally recognized hits and giving its U.S. partner a gateway into the world’s biggest PC and mobile gaming arena.

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