Blizzard and NetEase Suspending Game Services in China

[exochaft]

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.

[Morgaith]

Good! (i think).

[Meow]

Foreign companies are not allowed to operate online games in China. They have to either find a local partner or cease the operation.

[PixelFox]

Honestly this is probably just a negotiating tactic and there's an excellent chance they will work something out before the deadline.

[MoanaLisa]

China is a bad market for video games for the foreseeable future. Blizzard needs to make serious content adjustments just to be there—there's a cost associated with that for all content going forward—and with all the restrictions on players and the rest of it, it may well be that it's not something they need. The NetEase announcement is undoubtedly something of a pressure tactic but if the announcement is taken at face value, Blizzard doesn't seem to be interested in reconciling. The MSFT deal undoubtedly has something to do with this but it's hard to know precisely what given that legally there is to be no traffic between ATVI and MSFT until the deal is done. Does Ybarra occasionally have lunch with his old friends at MSFT? Perhaps.

EDIT: It's worth remembering that as far as revenue and profit are concerned, Blizzard is going from being a major part of ATVI's portfolio to being a relatively tiny piece of MSFT. That gives them some leeway to cut things that may be a drain on future business. It's not difficult to imagine that most game studios in the US and Europe are leery about being all-in with China as things stand.

[diller]

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

None, players in China aren't connected with the rest of the world.

[Lahis]

Allthat bending over backwards in front of CCP and this is the end result.

[Seiken3]

I truly wonder what this meant:

"Statement from Simon Zhu, President of NetEase Global Investment

Simon Zhu said:
As a gamer who spent ten thousand hours in the world of Azeroth, starcraft and overwatch, I feel so heartbroken as I will not longer have the access to my account and memories next year.

One day, when what has happened behind the scene could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make.

Feel terrible for players who lived in those worlds.
"

What jerk did what? o:

[Djaye]

if blizzard and Tencent make a deal, Blizz is dead to me. not that they have really been alive the past 6 years or so.

[Calfredd]

Allthat bending over backwards in front of CCP and this is the end result.

Blizzard quitting on China and not the other way around?

[Mysterymask]

I truly wonder what this meant:

"Statement from Simon Zhu, President of NetEase Global Investment

Simon Zhu said:
As a gamer who spent ten thousand hours in the world of Azeroth, starcraft and overwatch, I feel so heartbroken as I will not longer have the access to my account and memories next year.

One day, when what has happened behind the scene could be told, developers and gamers will have a whole new level understanding of how much damage a jerk can make.

Feel terrible for players who lived in those worlds.
"

What jerk did what? o:

Probably talking about president Pooh Bear without directly mentioning president Pooh Bear

[tomten]

I can't tell if this is literally the worst news ever or the best news ever....
All chinese gold bot farms will vanish... OR... Will they all massively dump down on all other regions?

[Lahis]

I can't tell if this is literally the worst news ever or the best news ever....
All chinese gold bot farms will vanish... OR... Will they all massively dump down on all other regions?

Why do people think Chinese gold farmers are playing on Chinese servers?

You can't buy any gold from chinese servers, why would they farm it on chinese servers?

[tomten]

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.

I argued this point just a week back... And people laughed at me and said "hurr durr, do you think the worlds biggest population doesn't bring in the big bucks"
And I argued no... And here we are... lel...

- - - Updated - - -

Why do people think Chinese gold farmers are playing on Chinese servers?

You can't buy any gold from chinese servers, why would they farm it on chinese servers?

Because I saw an asmongold video a while back about the chinese gold farmers on classic realms and how the game had literally no anti cheat with all the goodies still working, flying, wall hacks, all that jizz.
They are very very much active on western servers and since their profits had been cut they were moving a lot more operations over.
And this was long before this was even announced so I figured the same logic applies now but in even worse fashion.

[Magemaer]

Good! Free Honk Kong

[LanToaster]

Because I saw an asmongold video a while back about the chinese gold farmers on classic realms and how the game had literally no anti cheat with all the goodies still working, flying, wall hacks, all that jizz.
They are very very much active on western servers and since their profits had been cut they were moving a lot more operations over.
And this was long before this was even announced so I figured the same logic applies now but in even worse fashion.

It will most likely not affect any kind of China Farmer. Your WoW Account tied to your Region. With my EU Account I cannot Access Chinese, or US Servers. So, the only thing that goes away is the Service Offered to Chinese Accounts.

If the Blizzard Servers/Services get Blocked otherwise, those Chinese Gold Farmers will just use VPNs or otherwise circumvent those Blocks/Banns.
Its not that Easy to effectivly shut out Specific Parts from the internet.

[tomten]

It will most likely not affect any kind of China Farmer. Your WoW Account tied to your Region. With my EU Account I cannot Access Chinese, or US Servers. So, the only thing that goes away is the Service Offered to Chinese Accounts.

If the Blizzard Servers/Services get Blocked otherwise, those Chinese Gold Farmers will just use VPNs or otherwise circumvent those Blocks/Banns.
Its not that Easy to effectivly shut out Specific Parts from the internet.

You're not getting the point...
Chinese has been farming for chinese for the majority... But their profits has been declining and you've seen an insane rise in chinese bot farms on our western regions (hence the video from asmongold about it).
If they started to migrate more and more before this was even announced (the video is over a year old) what exactly do you think will happen when their entire market and region closes? They will just give up and find something else to do? Or will they all move to our regions? That's the question...
Not if you could trade gold cross regions...

[dope_danny]

Well that explains the 12 month sub lock in deal. Can't just get a new publisher without resubmitting every title for review for anything "conflicting with the ideas of the communist party" so thats at least a year of no blizzard in china. Rip those WoW classic MAU's.

[rhorle]

What jerk did what? o:

Didn't an "official Blizzard" chinese account make some bad comments a while back? A rogue actor could have brought greater oversight on the Chinese side that Blizzard can't/won't agree to.

https://kotaku.com/diablo-immortal-b...gam-1849084106

- - - Updated - - -

And this was long before this was even announced so I figured the same logic applies now but in even worse fashion.

To sell gold on non-chinese servers they have to already be playing on those servers. Internal gold selling operations will likely move to other games rather then enter an already crowded market. Or consolidate. I doubt there will be large influx on non-chinese servers because of this.

[Alicianna]

I‘m sorry for the Chinese players, because I think they are very passionate about the games.
The good thing is: I think a lot of decisions made about the games have been heavily influenced by NetEase and the Chinese government.
And I think a game rooted in western traditions of gaming made to many compromises for my taste.
You can best see that in the way Diablo Immortal was designed. It’s working extremely well in Asia but it’s not a big deal in the rest of the world.
Imagine that kind of influence on WoW or Overwatch? Pay-Per-Raid or Pay-Per-Match anyone?
That deal is gone for good. If Blizzard wants to keep the Chinese Crowd happy they should just license the whole thing and let them have it their way, even if it develops into something completely different.