The story behind NetEase and Activision breaking according to the New York Times

[Sensa1]

Interesting read:

https://www.nytimes.com/2023/03/29/t...a-breakup.html

[Koriani]

Hell, pay wall. Oh well.

[Edge-]

For anyone interested, here's a gift link so you can read the full article: https://www.nytimes.com/2023/03/29/t...smid=url-share

Also if you want a massively TLDR version, Massively OP has a pretty good recap: https://massivelyop.com/2023/03/29/a...leged-threats/

[Big Thanks]

Plz gief summary T_T im curious
edit: Thanks Edge

[SinR]

wait you mean to tell me that Bobby *DIDN'T* get on his knees to the Chinese Overlords and instead told them to piss off?

[Edge-]

wait you mean to tell me that Bobby *DIDN'T* get on his knees to the Chinese Overlords and instead told them to piss off?

Alternatively, he interpreted Netease trying to work with them in the face of new regulations as a threat and tanked any potential deals moving forward. The hilariously bad final deal offered with a half a billion in upfront costs for Netease was clearly bad faith as fuck.

I don't think either company comes out looking good in this, though. Netease was engaged in plenty of shady enough behavior trying to get even more control over Activisions properties in China (Activision has a very reasonable interest in ensuring that doesn't happen), and Activision largely played ball with a lot of the CCP bullshit over the years for that sweet, delicious Chinese money.

And now that's all going south and it's all a hilarious mess for the rest of us to watch.

IMO the more interesting bit was that China sure seems like they made up more of Blizzard's annual revenue than thought.

$750M (if remotely accurate) appears to be primarily for Blizzard rather than Activision-Blizzard's properties overall, to put that number in context for fiscal year 2022 -

That's 10% of Activision-Blizzard's $7.528B in revenue (not profit, revenue).
That's also around 35-40% of Blizzard's $2.01B in revenue (not profit, revenue).

This ain't some, "IT'S ALL TUMBLING DOWN" doomer post, it's more pointing out that when Kotick and Blizzard have been downplaying just how significant the withdrawal from the market would be for them, they're sure seeming like they're lying bigly.

A lot of big company executives would absolutely get on their knees and beg to protect roughly 10% of their annual revenue. But Bobby has bigger issues at play like making sure the Microsoft deal goes through so he can cash the fuck out with all those additional performance bonuses.

[vizzle]

Totally forgot about this. So WoW China really died? Thought they'd find another publisher at least a bit of time after. Pretty crazy to think that entire region and everything those players put into those characters is just gone for good.

[Edge-]

Totally forgot about this. So WoW China really died? Thought they'd find another publisher at least a bit of time after. Pretty crazy to think that entire region and everything those players put into those characters is just gone for good.

D:I is the only Blizzard (and I believe ATVI overall) property still active in China as that's under a completely separate licensing/partnership agreement. And made by Netease and all.

Otherwise yes, you're correct. Supposedly data is saved, supposedly, but there seemed to be some questions around it. Blizzard "offered" a last-minute deal that literally nobody would have ever taken just so they could say they have. Otherwise I doubt they're looking to kick off any negotiations with new regional publishing partners until after the Microsoft acquisition goes through.

[callipygoustp]

No fan of Bobby, but, in this case: good for him.

[Tech614]

Totally forgot about this. So WoW China really died? Thought they'd find another publisher at least a bit of time after. Pretty crazy to think that entire region and everything those players put into those characters is just gone for good.

The hardcore player base just moved to TW servers(seriously look at the price of the WoW token there right as Chinese servers closed) but yea sucks they had to start from scratch because 2 filthy rich entities couldn't come to an agreement. The more casual players wouldn't bother to boot up a VPN to play on TW servers which is where blizzard is losing a ton of money from this.

[lanerios]

An american resource writes an article about an american company breaking ties with a chinese company.. yea ofcourse that will completely be objective and totally not edited to look in favor of the US company.

The truth of what happened will always be unknown, it's guessing and probably both sides f*ed up.

[Tech614]

An american resource writes an article about an american company breaking ties with a chinese company.. yea ofcourse that will completely be objective and totally not edited to look in favor of the US company.

The truth of what happened will always be unknown, it's guessing and probably both sides f*ed up.

Did you even read it? It doesn't do anyone any favors and both look bad in this article.

[Edge-]

An american resource writes an article about an american company breaking ties with a chinese company.. yea ofcourse that will completely be objective and totally not edited to look in favor of the US company.

The truth of what happened will always be unknown, it's guessing and probably both sides f*ed up.

That's...what the article kinda gets at if you read it. It's not some PR fluff piece for Activision here.

[unfilteredJW]

An american resource writes an article about an american company breaking ties with a chinese company.. yea ofcourse that will completely be objective and totally not edited to look in favor of the US company.

The truth of what happened will always be unknown, it's guessing and probably both sides f*ed up.

Reading the article was too much for you eh?

[vilememory]

Reading the article was too much for you eh?

We are here only to shit upon this game, to repeatedly cry that WoW is dead and Blizzard with it. We will keep repeating this until it comes true and at which point we will strut about with a smug air of superiority about how right we were. But yeah seems like both sides were shit and if they couldn't get what they wanted were willing to just scrap it all.

[Gaidax]

From the sounds of article - NetEase burned one bridge too many. I'd be very suspicious too about actual intentions of a partner who has a history of undermining the partnership.

It sounds to me that a serious trust issue developed over NetEase BS over the years, article even points out that ActiBlizz considered bailing even beforehand just because of that BS.

So, I imagine the cup has finally runneth over and they both moved on.

[Koriani]

ooh thanks for the other links Edge!

Also I gotta wonder, as much as yes, both companies screwed up here- but as prior poster mentioned - how much Chinese government's overall anti-gaming atmosphere/laws being enacted/etc. may have also contributed to Bliz's desire to try and work out a deal vs. just bailing. Not saying its 80% of the reason or anything, but it had to figure in to how much effort, or not, they were going to put into this to make it 'worth their wile' to continue to try and push making money in an industry the Chinese government is working to regulate to the extreme.

I just feel bad for all the players getting screwed through no fault of their own. All that time, money, invested energy and relationships with players - down the drain with no recourse to do anything about it.

[Tech614]

ooh thanks for the other links Edge!

Also I gotta wonder, as much as yes, both companies screwed up here- but as prior poster mentioned - how much Chinese government's overall anti-gaming atmosphere/laws being enacted/etc. may have also contributed to Bliz's desire to try and work out a deal vs. just bailing. Not saying its 80% of the reason or anything, but it had to figure in to how much effort, or not, they were going to put into this to make it 'worth their wile' to continue to try and push making money in an industry the Chinese government is working to regulate to the extreme.

I just feel bad for all the players getting screwed through no fault of their own. All that time, money, invested energy and relationships with players - down the drain with no recourse to do anything about it.

I mean the government is certainly the biggest issue here. If this was a normal country as most of the developed world blizzard could simply provide WoW on their own without needing a domestic partner at all it's their regulations that add this completely unnecessary step. In regards to the situation as it stands though I don't think netease or blizzard share any less of the blame.

[Mardux]

wait you mean to tell me that Bobby *DIDN'T* get on his knees to the Chinese Overlords and instead told them to piss off?

Wait, you mean to tell me you have no idea about anything that happened pre-ATVI?

[Val the Moofia Boss]

Plz gief summary T_T im curious

Increasing regulation on video games in China has made Acti-Blizzard's suits increasingly nervous. They wanted to mitigate risk by asking Netease to pay them $500 million upfront rather than pay over time. Netease declined. So Blizzard walked away and is trying to find other companies to distribute their games. Supposedly during negotiations over a zoom call and through translator, the Acti-Blizzard suits interpreted Netease as threatening to use the Chinese government against Blizzard, when what Netease actually intended to say is that Acti-Blizzard would face the same legal troubles from the government even if they went to another company, so they didn't understand why Acti-Blizzard would want to switch companies given that they had been working together for 18 years.

- - - Updated - - -

The hilariously bad final deal offered with a half a billion in upfront costs for Netease was clearly bad faith as fuck.

That isn't a bad deal. Given that WoW China rakes in $750 million annualy, a one time upfront cost of $500 million would probably pay for itself within a year. Online games like WoW are about making revenue over long periods of time. The upfront cost is negligible on such a long time scale. But Netease declining could be interpreted as a confirmation of Acti-Blizzard's fears that operating in China would be increasingly unprofitable (hence why they wanted money upfront to shield themselves).