Blizzard hits back at NetEase amid lawsuit reports

The ongoing feud between Blizzard and NetEase ramped up this week after reports out of China suggested NetEase had filed a lawsuit against the World of Warcraft maker demanding £35m.

Wowhead covered a report from Sina Technology that claimed NetEase has filed a lawsuit in Shanghai against Blizzard seeking ¥300 million in refunds for discontinued games and services to the over one million players it had in the region before servers were shut down in January.

World of Warcraft, Overwatch, Hearthstone, Diablo 3, Heroes of the Storm and the StarCraft series became unplayable in China on 24th January, when NetEase's licence expired (mobile game Diablo Immortal was unaffected).

A war of words between the two companies has run since 2022, when it became clear negotiations to extend their 14-year partnership had broken down.

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Late last year, a senior figure at NetEase publicly criticised the actions of an unnamed "jerk" for the breakdown in relationship between his company and Activision Blizzard, which is run by controversial boss Bobby Kotick.

NetEase president of global investment and partnership Simon Zhu - who said he had spent "10,000 hours" playing Blizzard's games - blamed behind the scenes "damage" done by a "jerk".

"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," Zhu wrote at the time. "Feel terrible for players who lived in those worlds."

Now, according to Sina Technology, NetEase's lawsuit demands compensation for refunds it insists it paid to players, unsold merch and deposits on undeveloped games.

There's also apparent word of "unequal provisions favouring Blizzard Entertainment" in the licence agreement, such as bet-on agreements and large sum deposits by NetEase in order to insulate Activision from risk.

However, an Activision Blizzard spokesperson told Eurogamer it had yet to receive the lawsuit. NetEase has yet to comment on the lawsuit, either (Eurogamer has asked for comment).

"We haven't received the lawsuit yet, but we are confident we aren't in breach of any licensing agreements," the Activision Blizzard spokesperson told Eurogamer.

"The terms NetEase appears to be complaining about reflect standard industry practice and have been mutually beneficial for years.

"While this persistent campaign by one former partner is disappointing and puzzling, it's important to note that we have enjoyed nearly two decades of positive experiences operating in China, and remain committed to serving players and protecting their interests."

As the Blizzard / NetEase feud rumbles on, Blizzard's games remain unavailable to play in China through traditional means. Western companies must partner with a Chinese publisher in order to sell and run video games in the country, which means Blizzard will need a new partner if it wants to get World of Warcraft, for example, up and running in the lucrative market once again. (NetEase publishes Diablo Immortal in China in what must be one of the most awkward video game corporate relationships around.)

One thing that seems clear is Blizzard and NetEase's disdain for one another. In January, NetEase staff smashed up a giant World of Warcraft statue by their studio before sipping on NetEase-branded drinks. The drinks in question were reportedly a reference to a Chinese slur for a seemingly innocent but ultimately manipulative person - literally branded as a "Green Tea".

In March, the New York Times reported Activision Blizzard's acrimonious breakup with NetEase was affected by Bobby Kotick feeling "threatened".

Specifically, Kotick believed NetEase boss Ding Lei had suggested his company could sway the Chinese government's decision over whether to pass Microsoft's acquisition of Activision Blizzard in the country.

But this threat was simply a misunderstanding by Kotick, apparently. Instead, NetEase's Ding had been attempting to point out potential hurdles for the deal passing in China with Activision Blizzard's partnership with NetEase in its then-current form.

Kotick, however, felt the mention of the topic to be a "threat", and something which helped lead to his decision to end the partnership and look for a new Chinese partner.