Blizzard and NetEase Suspending Game Services in China

this is actually wild

I wonder if Tencent will swoop and work out a deal with Blizzard.

How many gold resellers do you think are freaking out right now?

Originally Posted by JSoup

How many gold resellers do you think are freaking out right now?

None; none of them play WoW legally so this will change nothing for them.

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Originally Posted by SpaghettiMonk

I found multiple sources that say that this partnership only contributed "3% of Activision Blizzard's consolidated net revenues in 2021", which is about 200 million, or about 10% of the Blizzard segment's revenues.

I would have expected that number to be higher given all the talk about how big a market China is for Blizzard.

https://www.statista.com/statistics/...nue-by-region/

That talk is, I suspect, Chinese state-sponsored propaganda meant to give the impression that their business accounts for a lot more than it does, to give them artificial bargaining power. After all, if investors and shareholders are convinced, that's all that matters.

I find myself wondering if this is a finger at NetEase or a finger at China. Also I totally had forgotten about until I checked for articles on it, but now I'm wondering how much of this is related to Microsoft's efforts towards acquiring ATVI.

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Originally Posted by SpaghettiMonk

I found multiple sources that say that this partnership only contributed "3% of Activision Blizzard's consolidated net revenues in 2021", which is about 200 million, or about 10% of the Blizzard segment's revenues.

I would have expected that number to be higher given all the talk about how big a market China is for Blizzard.

Diablo Immortal was excluded from that number, so it is most likely it will be higher than 3%. I'd guess that the general decline of the WoW population and Overwatch being ignored in favor of working on Overwatch 2 are relevant factors.

Originally Posted by TEHPALLYTANK

I find myself wondering if this is a finger at NetEase or a finger at China. Also I totally had forgotten about until I checked for articles on it, but now I'm wondering how much of this is related to Microsoft's efforts towards acquiring ATVI.

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Diablo Immortal was excluded from that number, so it is most certainly higher than 3%.

diablo immoral has also only been out in china for around a quarter of a fiscal year so it wouldn't be included anyways.

Originally Posted by SpaghettiMonk

I found multiple sources that say that this partnership only contributed "3% of Activision Blizzard's consolidated net revenues in 2021", which is about 200 million, or about 10% of the Blizzard segment's revenues.

I would have expected that number to be higher given all the talk about how big a market China is for Blizzard.

That's probably why the deal died - it seems likely the profits were all going to China, not to Blizzard. At some point it's just not worth the hassle, just to line someone else's pockets with your own product.

It's possible someone else will offer a sweeter deal, but a lot of this is direction from above: foreign companies are REQUIRED to work through Chinese intermediaries, and they're not exactly going to be super willing to undercut a system designed to funnel money a certain way. But who knows, it's a very complicated landscape both economically and politically, and there's lots of deals to be had. Wait and see.

good fuck em

My money is on Microsoft not wanting to extend the deal because they want to renegotiate or they already have plans for a replacement.

Originally Posted by sensei

My money is on Microsoft not wanting to extend the deal because they want to renegotiate or they already have plans for a replacement.

Inc new deal with Tencent.

Originally Posted by SpaghettiMonk

Right - the political part of it might have been a factor too.

I doubt it, or they wouldn't have been so quick to squash everyone around the Hong Kong incident. 99% chance it was just about the money.

China's what... their biggest market at this point? Maybe second behind Korea? Definitely bigger than NA ever was for them in terms of raw playerbase.

If this is actually curtains for them in China that's potentially an actual death knell.

Does this mean MMO Champion will stop screaming china for everything they don't like

Originally Posted by Slowpoke is a Gamer

China's what... their biggest market at this point? Maybe second behind Korea? Definitely bigger than NA ever was for them in terms of raw playerbase.

If this is actually curtains for them in China that's potentially an actual death knell.

https://www.statista.com/statistics/...nue-by-region/

If this is accurate, I think it hurts but it's not a death knell or even a disaster.

Originally Posted by Slowpoke is a Gamer

China's what... their biggest market at this point? Maybe second behind Korea? Definitely bigger than NA ever was for them in terms of raw playerbase.

If this is actually curtains for them in China that's potentially an actual death knell.

No it's not their biggest market. It's 3% for the company as a whole and 10% for Blizzard. They'll just make a contract with another company like Tencent. This also doesn't impact Diablo Immortal.

Considering China is cutting back on how much kids can play, they may extend that to adults as well. That and they may be making their own knock off version of every Blizzard and Activision game that they can control and micromanage players. Doesn't matter why, just going to be interesting going on.

Originally Posted by Atrea

None; none of them play WoW legally so this will change nothing for them.

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https://www.statista.com/statistics/...nue-by-region/

That talk is, I suspect, Chinese state-sponsored propaganda meant to give the impression that their business accounts for a lot more than it does, to give them artificial bargaining power. After all, if investors and shareholders are convinced, that's all that matters.

The Warcraft movie is still the biggest video game movie of all time. Us audiences mostly snubbed it. Most of that money is from China. People seem to want to hide their warcraft love stateside. Chinese fans go hard. I wonder who buys the most merch.

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Originally Posted by GUZ

good fuck em

Man, I dislike the Chinese government but I've got nothing against Chinese Warcraft nerds.

Originally Posted by SpaghettiMonk

Right - the political part of it might have been a factor too.

They aren't pulling out of China. Microsoft is already partnered with Tencent, so Tencent will likely take the contract once Microsoft takes over.

Originally Posted by rhorle

I wonder if Tencent will swoop and work out a deal with Blizzard.

The whole issue is that the Chinese government is requiring personal data and other information that Activision - and, shortly, Microsoft - will have nothing to do with. This will be the case with any Chinese company hoping to have some relationship with Activision. This is the end of Blizzard in China for now, and possibly for good.

Originally Posted by Biomega

That's probably why the deal died - it seems likely the profits were all going to China, not to Blizzard. At some point it's just not worth the hassle, just to line someone else's pockets with your own product.

It's possible someone else will offer a sweeter deal, but a lot of this is direction from above: foreign companies are REQUIRED to work through Chinese intermediaries, and they're not exactly going to be super willing to undercut a system designed to funnel money a certain way. But who knows, it's a very complicated landscape both economically and politically, and there's lots of deals to be had. Wait and see.

I think it needs to be kept in mind that net revenue that US-based companies make from the Chinese market is actually pretty small compared to what it would be domestically, because due to things like taxes, currency conversions, tariffs, regulatory issues, etc. eat up a lot of the profit. Same thing happens with movies, where the listed revenue that a film makes is pretty misleading as it does not factor in how much money that the production companies are actually making (which is why US production companies would rather have a larger proportion of their revenue coming from domestic crowds instead of foreign).

I'd have to agree that this is both an economic and political issue, as you cannot really separate the two when it comes to China.