In January, Chinese gamers lost access to Blizzard games (opens in new tab), including World of Warcraft, Hearthstone, Diablo 3, and Overwatch, as a result of a standoff between Activision and its Chinese partner NetEase a few months earlier. ), including World of Warcraft, Hearthstone, Diablo 3, and Overwatch. However, according to a report in the New York Times (opens in new tab), the relationship between the two parties has been strained for some time, but the incident that ultimately ended the relationship may have been a misunderstanding.

According to the report, the relationship between Activision and NetEase has been strained for some time. For one thing, Activision CEO Bobby Kotick was unhappy with NetEase's $100 million investment (opens in new tab) in Bungie in 2018, which delayed Bungie's production of content for Destiny 2, and Kotick was concerned that Bungie was "a investment to become a "multi-franchise entertainment studio" and was concerned that the work would be further delayed; Kotick was also reportedly unhappy with another NetEase investment in a studio founded by a former Activision executive, which resulting in an agreement in 2019 prohibiting NetEase from hiring former Activision employees or investing in their studios.

These tensions were likely still present when representatives of the two companies began negotiating proposed changes to the Activision-NetEase licensing agreement in October 2022: NetEase would no longer be able to sell Activision's games (including Blizzard's games) through the wanted to license them directly, rather than through joint venture third parties.

In a negotiation call conducted through an interpreter, NetEase CEO William Ding reportedly said that depending on the progress of the new licensing negotiations, he could persuade the Chinese government to block or approve Microsoft's proposed acquisition of Activision Blizzard Activision Blizzard. Activision executives took this statement as a threat that if they did not give in to our demands, they would break their agreement with Microsoft, but NetEase executives said that if they did not sign a new licensing agreement that would give NetEase more control, Microsoft would take Activision under its wing and NetEase executives said they were merely pointing out that without a new licensing agreement giving them more control over NetEase, Microsoft would have to deal with China's strict regulations on its own.

After the conference call ended, Activision said it would agree to a new licensing deal if NetEase paid $500 million up front; NetEase said no, and then said that while Activision looked for a new publishing partner in China, it would continue to access the game It then turned down a last-minute offer (opens in new tab) to extend its existing contract for another six months so that it could continue to access the game while Activision looked for a new publishing partner in China.

It was clearly a bad breakup: shortly before Blizzard's games were no longer available in China, NetEase employees broke a giant statue of World of Warcraft's legendary two-handed axe Gorehowl (opens in new tab) outside the studio that handles Blizzard's licensing. A NetEase spokesperson accused Activision of continuing to "harass and taunt companies and regulators around the world."

Activision said it was "committed" to Chinese players when its games went dark and would look for alternative ways to operate games in China. A possible replacement distributor is rumored to be The9, which published "World of Warcraft" in China before Activision moved to NetEase. Microsoft's proposed acquisition also appears to be moving forward: the UK's Competition and Markets Authority recently changed its mind about the deal and said it is no longer concerned (open in new tab) about the possibility of Microsoft making the "Call of Duty" game an Xbox exclusive.