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PC Gamer
PC Gamer
Rich Stanton

The gloves come off as NetEase sues Blizzard for $44 million

WoW: Wrath of the Lich King Classic

Update: Activision Blizzard says "We have not received a suit or related papers from NetEase yet" and adds in response to one specific claim that "it’s been covered accurately that NetEase is contractually responsible for operations (refunds, etc)".

Original story: Blizzard's games were published in China by NetEase for 14 years, until that licensing agreement came to an end in January. It was not a harmonious break-up. Both sides blamed the other for both the collapse of their agreement and the inability to work out a way to transfer player data to any new partner's servers (Blizzard still lacks a new Chinese publisher). The end came with the in-your-face symbolism of NetEase employees smashing up a giant Gorehowl statue (a legendary World of Warcraft axe) in front of their offices, before drinking "Blizzard green tea", the latter essentially a highly misogynistic Chinese insult implying Blizzard is devious, greedy and impure.

So that all went well, and today brings the news that NetEase is filing a lawsuit against Blizzard that's looking for 300 million Chinese Yuan ($43.5 million / £35 million) made up of various claims (the suit was first reported by Chinese media Sina Technology, via WoWhead). The main elements are: 

  • Blizzard promised refunds for players who wanted them when the Chinese servers went offline on January 23, and NetEase says it's been left to honor this commitment to 1.12 million players and has done so.
  • Violation of licensing agreements, and redress for "unequal provisions" in same.
  • Compensation for unsold merchandise inventory.
  • "In addition, this lawsuit involves many 'overlord clauses' signed between Blizzard and Netease," reads the The Sina Finance report, "including requiring Netease to pay a huge deposit in advance for several games, but Blizzard did not refund the relevant games when they were not developed."

That last point is the most tantalising, with NetEase claiming it paid Blizzard deposits for several games that were in the end not developed. The wording, however, could mean plenty of things other than unannounced Blizzard games, including existing products being tweaked for the Chinese market. It could also just be NetEase threatening to spill some of Blizzard's secrets. No doubt, however, more will come out about the specifics. 

Some of NetEase's grievances in the suit seem more straightforward, such as the claim Blizzard "outright refused" to take on the obligation of refunding Chinese players, and also did not pay a pre-agreed commission fee relating to these refunds. But there are also some of the same old complaints about Blizzard and the unequal nature of the agreement: Both Blizzard and NetEase did very well out of this over the years, so to turn around at the end and wail about the oppressive terms feels a little bitter.

I've contacted Blizzard for comment on the lawsuit and its claims, and its response is now at the top of the article.

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