Nobody wins in Blizzard’s divorce from NetEase in China | The DeanBeat

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One of the saddest messages about Blizzard Entertainment’s divorce from NetEase over publishing World of Warcraft and other games in China came from a top executive at NetEase.

Simon Zhu, president of global investment and partnership for NetEase Games, said on his LinkedIn page, “As a gamer who spent ten thousand hours in the world of Azeroth, StarCraft and Overwatch, I feel so heartbroken as I will no longer have the access to my account and memories next year.”

But the second part of that message suggested some behind-the-scenes skullduggery.

He added, “One day, when what has happened behind the scene [sic] could be told, developers and gamers will have a whole new level [of] understanding of how much damage a jerk can make. Feel terrible for players who lived in those worlds.”

Let me take a guess and suggest that Zhu is calling Activision Blizzard CEO Bobby Kotick a “jerk.” Given Kotick’s reputation in business, anyone on the opposite side of the negotiation table is apt to apply that name to him.

To be a fly on the wall of these negotiations would be quite interesting — that’s an understatement. As a consequence of the failure of the negotiations, starting on January 23, Blizzard will suspend services for World of Warcraft, Warcraft III, Hearthstone, Overwatch 2, StarCraft, Heroes of the Storm and Diablo III. 

Blizzard’s own comment on the situation wasn’t very revealing. It said the two parties have not reached a deal to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees, and the agreements are set to expire in January 2023.

The company said it will suspend new sales in the coming days and Chinese players will be receiving details of how this will work soon. Upcoming releases for World of Warcraft: Dragonflight, Hearthstone: March of the Lich King, and season 2 of Overwatch 2 will proceed later this year. Call of Duty: Mobile is governed by agreements with other third parties that are unaffected.

“We’re immensely grateful for the passion our Chinese community has shown throughout the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” said Mike Ybarra, president, Blizzard Entertainment, in a statement in the press release. “Their enthusiasm and creativity inspire us, and we are looking for alternatives to bring our games back to players in the future.”

In an email to employees, Ybarra said, “Their approach was not aligned with our commitment to players, employees, and our operating principles. As a result, we are ending our current agreements and exploring alternatives for serving players in the country.”

While they are still collaborating on Diablo Immortal in a separate deal, it is tragic for players that Chinese accounts will likely disappear once the expiration date comes about. Some of those accounts have existed for 14 years, since the deal was first struck. Player data should be treated as an absolute treasure. It should not be held hostage during negotiations.

StarCraft II in action.

And it is a poster-child example of what advocates of decentralization refer to as a worst-case scenario. Because players don’t “own” the stuff they paid for in the game, they probably can’t take the stuff they have paid for and created with them when the game shuts down. It’s just like I can’t take my 39,000 followers or my tweet history with me if Elon Musk drives Twitter down the drain.

Bloomberg reported the ownership of player data and intellectual property was one of the sticking points in the negotiations. NetEase put a press release out saying talks had collapsed.

 “We have put in a great deal of effort and tried with our utmost sincerity to negotiate with Activision Blizzard so that we could continue our collaboration and serve the many dedicated players in China,” said William Ding, CEO of NetEase, in a statement. “However, there were material differences on key terms and we could not reach an agreement. We hold high regard in our product and operational standards and abide by our commitments to Chinese players.” Ding added, “We are honored to have had the privilege of serving our gamers over the past 14 years and have shared many precious moments with them during that time. We will continue our promise to serve our players well until the last minute. We will make sure our players’ data and assets are well protected in all of our games.”

But that data and those assets might not be returned to players if the companies dispute who actually owns that data, even in the case of a shutdown.

I don’t know enough about this to take a side. But it is the worst possible outcome for a negotiation. It is possible that players will be able to continue onward if Activision Blizzard strikes a deal with another Chinese company. That’s what happened Blizzard moved on from The9 to NetEase. But I would wonder if the ownership of data for the player accounts would move to the new provider. The companies sound like they don’t agree who actually owns the player data. And that’s a recipe for litigation.

The only clear thing here is that nobody will win in this standoff. The negotiators should get back to the table and remember Microsoft’s Xbox Adaptive Controller message: When everybody plays, we all win.

[Updated: 11/18/22 at 4:02 pm Pacific with additional info.]

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