International Law

Wow! Blizzard Switches WoW Licensee in China

By Stan

This has been rumored for some time now, but it’s still big news (h/t China Tech News):

The rumors have proven true: Blizzard Entertainment Inc. is not renewing its online game contract in China with The9, choosing instead to move the World of Warcraft game to a subsidiary of Chinese Web portal NetEase.com.

Blizzard and NetEase.com announced a partnership on Blizzard Entertainment’s Warcraft III, StarCraft II, and Battle.net gaming platform last summer. This new three-year deal for World of Warcraft further enhances the partnership between Blizzard Entertainment and NetEase and promotes a consistent level of quality and service in mainland China for all Blizzard Entertainment games involved in the partnership.

I’ve been a bit critical in the past about the rapid expansion of online games and gaming enterprises in China. I was, and still am, worried about too many newbies entering the market with crappy games that no one will play just because of the tremendous growth of the market.

Here’s the upside of industry growth here. There are lots more experienced game operators in China these days, and foreign licensors are not married to their local licensee operator the same way they used to be.

Let’s hope the separation between The9 and Blizzard goes smoothly without running into any of the usual Sino-foreign JV-type problems. From a legal standpoint, saying goodbye to a licensee is a much easier proposition than with a JV partner, but in this case, a lot could go wrong.

By the way, The9 shares got hammered on the news, dropping 22%. Ouch.

More info from the WSJ and Barrons.

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Full post as published by China Hearsay on April 16, 2009 (boomark / email).