Activision Blizzardย didnโt have a great start to the week. First reports claim that the European Unionย will oppose the merger with Microsoftย (when it finally publishes its official conclusions), further complicating the timeline to get the merger done before the summer.
And as we detailed yesterday, the publisher of World of Warcraft, Diablo, and Overwatch claimed that it asked its now-former Chinese distributorย NetEase to give it a six-month extensionย as it sought out a new partner. NetEase declined, but Activision Blizzard issued a statement putting the blame for the deal squarely on it. NetEase punched back with its own venomous statement, but photos of a barren office that used to house their joint operations from last week (when Activision Blizzard claimed it asked for that extensions) shows that the bell had already been rung and it was too lateโ100 people had been laid off at that point.
To add insult to injury,ย photos from a NetEase live streamย this morning showing the company dismantling the iconic “Gorehowl Axe” statue (from Warcraft) on its property really really drove the point home that the party was over. Itโs a shame for fans of Blizzard Games in China because it could be months or even years before they return due to the Chinese governmentโs strict policy on game approvals.
More importantly, it leaves a big question mark for esports teams in the region who are part of theย Overwatch Leagueย such asย Chengdu Hunters,ย Guangzhou Charge,ย Shanghai Dragons (owned by NetEaseย ๐คฏ asย Hongyu Chenย just pointed out to me),ย andย Hangzhou Spark. They most certainly wonโt be playing any matches in home venues in China because once NetEase is out of the picture later this month the game isnโt legal (it no longer has official approval as far as we know) to be played in the region anymore. I suppose they could go to Korea and play there but thatโs not exactly optimalโฆ
The whole play by Activision Blizzard to renegotiate its distribution deal really backfired, and it seems like whoever was in charge just expected NetEase to acquiesce. They had to be thinking that, because there was just too much at stake: the game approval from the Chinese government, removing a game from a region that is vital to three OWL teams, and losing millions in revenue from some of the most rabid Blizzard fans in the world.
Thatโs my take on the situation, but iโd love to hear what you think. Drop a comment and share your thoughts! Happy Wednesday. – James.
This article originally appeared in The Fudge Retort newsletter.