Blizzard is being sued for €39.4 million – Divorce from ex-partner was ugly, could now also be expensive

earthpressnews

Blizzard has published online games such as WoW, Overwatch, Hearthstone and Diablo 3 in China for 14 years. For this purpose, a partnership was entered into with the Chinese partner NetEase. In January 2023, that partnership fell apart and Blizzard’s game servers shut down, much to the chagrin of Chinese fans. Now NetEase wants to see money and not too tight.

This is the background to the lawsuit: In order to do business in China as a Western company, you have to enter into a partnership with a Chinese company. For Blizzard, that was NetEase for 14 years. The partnership has annual sales of $750 million.

But negotiations to extend the long-term contract broke down in 2021, according to insider reports, and an ugly, public divorce ensued. While Blizzard seemed cool, NetEase went berserk and smashed an orc statue.

Now the divorce has an aftermath.

What is this lawsuit? The Chinese site Sina.com reported on the lawsuit on the afternoon of April 24:

  • NetEase filed the lawsuit in Shanghai, accusing Blizzard of violating a number of licensing agreements
  • They are demanding 300 million Chinese yuan in compensation, which is around 43.448 million euros

    • We were in the midst of the chaos that is the release of WoW Dragonflight: “I can’t accept anything here”

    More videos

    Blizzard is said to have outstanding accounts in China

    What are you accusing Blizzard of? Among other things, it says: Blizzard promised Chinese players to refund them money if the Chinese servers go offline. NetEase made that commitment to 1.12 million players and now wants to be compensated for it. Blizzard refused to pay NetEase the “commission” for the national servers of almost 13.15 million euros.

    NetEase also wants money for “unsold merchandise.”

    And there is talk of a “clause” according to which NetEase has transferred large sums of money for “several games” in advance. Blizzard is said not to have paid back the money even though the promised games didn’t come.

    What’s going on there? We have often reported on MeinMMO about the separation of Blizzard and NetEase. NetEase was apparently extremely angry at how the split went. One even destroyed an orc statue by Blizzard.

    There was a report a few weeks ago that the split was due to a misunderstanding:

  • In 2021, there are said to have been misunderstandings in negotiations to extend the deal
  • NetEase wanted to design the partnership differently and demanded more rights, also to appease the Chinese government, which is suspicious of such deals
  • Blizzard, in turn, wanted better conditions for itself, which NetEase found outrageous. The Chinese side refers to a report by the New York Times and speaks of a one-off payment of 500 million US dollars that Blizzard allegedly demanded in order to extend the contract.

    • Ultimately, NetEase reportedly said something that Activision Blizzard took as a threat that NetEase might lobby the Chinese government to oppose Microsoft’s purchase of Activision Blizzard.

    At NetEase, however, this was not seen as a threat, but was seen as an accommodating trust.

    After the supposed threat, the negotiations collapsed and many tens of thousands of WoW players lost their virtual home in China.

    In any case, the already dirty breakup seems to be getting even worse.

    WoW: 100,000 players lose their favorite MMORPG – report reveals the background to Blizzard’s failure

    mmod-game