Difference between revisions of "Katie Zhao"

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*Starcraft
 
*Starcraft
 
*Heroes of the Storm
 
*Heroes of the Storm
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Blizzard games going offline in China is not only a dispute between two industry leads on the opposite sides of the globe, but it also means erasing progress data that players have been investing in for years. Many devotees of the popular game took to social media networks to bemoan the loss, including mainstream celebrities such as [https://en.wikipedia.org/wiki/Joker_Xue Joker Xue], who [https://m.weibo.cn/detail/4861407227810923 posted on Weibo saying] “Don’t know what the hell Bobby Kotick is doing, but Blizzard is still the best real-time strategy creator in my heart. I also believe it will come back. I hope we can still meet in the lost temple and big game hunters. Goodbye young us…” (machine-translated). Sentiments like this are prevalent as many uncertainties are still in the air.
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Blizzard games going offline in China is not only a dispute between two industry leads on the opposite sides of the globe, but it also means erasing progress data that players have been investing in for years. Many devotees of the popular game took to social media networks to bemoan the loss, including mainstream celebrities such as [https://en.wikipedia.org/wiki/Joker_Xue Joker Xue], who [https://m.weibo.cn/detail/4861407227810923 posted on Weibo saying] “Don’t know what the hell Bobby Kotick is doing, but Blizzard is still the best real-time strategy creator in my heart. I also believe it will come back. I hope we can still meet in the lost temple and big game hunters. Goodbye young us…” (machine-translated). “Knowing that the split is set in stone, I’m still deeply saddened by how things ended,” a Weibo user [https://weibo.com/1239246050/MpLtUwLYD?refer_flag=1001030103_ wrote], adding a series of crying emojis. “Playing WoW with my homies was such a major part of my childhood and adolescence. These are memories I’ll forever cherish,” another person [https://weibo.com/1310630777/MpDM521QF?refer_flag=1001030103_ commented]. Sentiments like this are prevalent as many uncertainties are still in the air.
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== Background ==
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Under Chinese law, all digital games are required to receive a license from authorities in order to be distributed locally and fully monetized. Because non-Chinese entities can’t submit games to Chinese regulators for review, foreign publishers have to team up with local companies if they want to introduce games to the Chinese market. <ref> Yuanyuan, Z. (2023, January 27). Activision Blizzard and Netease's Feud, explained. The China Project. Retrieved February 10, 2023, from https://thechinaproject.com/2023/01/26/activision-blizzard-and-neteases-feud-explained/ </ref>
  
 
== The Dissolution ==
 
== The Dissolution ==
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=== Blizzard Side ===
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In 2019, Blizzard suspended a professional [https://en.wikipedia.org/wiki/Hearthstone Hearthstone] player named Ng Wai Chung from play for a year and forced him to forfeit tournament winnigs in the Hearthstone Grandmasters Tournaments. Around the same time, one of the largest series of political demonstrations were taking place in Hong Kong, where people cried for the Chinese Communist Party to not intervene with the political system in Hong Kong. During a Taiwan Hearthstone stream interview, Chung expressed his stance to “liberate Hong Kong”, which would be deliberately going against the goal of the Chinese Communist Party <ref>  Clark, P. A. (2019, October 21). What to know about the esports backlash to Blizzard over Hong Kong. Time. Retrieved February 5, 2022, from https://time.com/5702971/blizzard-esports-hearthstone-hong-kong-protests-backlash-blitzchung/
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</ref>.  Blizzard banning Chung indicates that they sided themselves with the CCP, which created a lot of controversies surrounding Blizzard’s relationship with Chinese censors.
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 +
Blizzard’s reputation has also taken a down turn in recent years. In July 2021, a lawsuit against Blizzard began with employees protesting against the company’s poor handling of ongoing sexual harassment allegeations. “For years, Activision Blizzard’s open ‘frat boy’ environment fostered rampant sexism, harassment and discrimination with 700 reported incidents occurring under CEO Robert Kotick’s watch,” the lawsuit explains<ref> Silberling, A. (2022, October 13). Activision Blizzard is once again being sued for sexual harassment. TechCrunch. Retrieved February 12, 2023, from https://techcrunch.com/2022/10/13/activision-blizzard-is-once-again-being-sued-for-sexual-harassment/
 +
</ref>. “The sexual misconduct was often committed by executives and in the presence of HR.” A report from the Wall Street Journal last year found that the CEO [https://www.wsj.com/articles/activision-videogames-bobby-kotick-sexual-misconduct-allegations-11637075680 knew for years] about rampant sexual harassment at the company, but failed to act.
 +
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Not long after the lawsuit began, on January 18, 2022, American tech giant Microsoft announced that they plan to acquire Blizzard for $68.7 billion in cash. If approved by regulatory and shareholders, it will be the largest vide game acquisition in history, making Blizzard, among with its other merged sectors, be under the [https://en.wikipedia.org/wiki/Xbox_Game_Studios Xbox Game Studios] brand. There are theories saying Microsoft may have intervened in the Blizzard-NetEase negotiations, since the official merge would come soon after the supposed contract renewal. On Feburary 8, 2023, the CEO of Activision Blizzard, Bobby Kotick went on CNBC to ease [https://www.rockpapershotgun.com/uk-regulators-expected-to-give-microsoft-a-thumbs-down-on-their-activision-blizzard-acquisition UK regulators’ reluctance] to approve the Microsoft acquisition. “Sony Studios goes back 80 years. Nintendo has the very best characters that exist in video games. I think [European regulators] are a little confused about where competition is today. The best companies in the world right now are companies like Tencent and ByteDance. And these are all companies that have protected markets. We struggle to enter the Japanese market, we can’t enter the Chinese market without a joint venture partner. The competition isn’t actually European companies and American companies, it’s really those companies in Japan and China.” <ref> YouTube. (2023, February 7). Activision Blizzard CEO explains why Tencent and ByteDance are the best companies in the world. YouTube. Retrieved February 12, 2023, from https://www.youtube.com/watch?v=QMhgIxo1Xi0
 +
</ref> Kotick wanted to give the impression that U.S. and Europe are united against the two entirely different nations of China and Japan, and ultimately, keep the market dominance within the white nations.
  
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=== Between Blizzard & NetEase ===
 
In Activitsion Blizzard’s 2021 Third Quarter Financial Results Report Report, their long-term publishing partner NetEase’s name was not mentioned in the document, but replaced with “a third party covering the publication of several Blizzard titles in China”<ref>Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial  
 
In Activitsion Blizzard’s 2021 Third Quarter Financial Results Report Report, their long-term publishing partner NetEase’s name was not mentioned in the document, but replaced with “a third party covering the publication of several Blizzard titles in China”<ref>Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial  
 
  </ref>. The China market was noted to be only 3% of Activision Blizzard’s consolidated net revenues, which can come off as downplaying NetEase’s contribution, creating adverse sentiments<ref>Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial  
 
  </ref>. The China market was noted to be only 3% of Activision Blizzard’s consolidated net revenues, which can come off as downplaying NetEase’s contribution, creating adverse sentiments<ref>Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial  
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On January 19, 2023 Blizzard released a lengthy statement stating that they re-sought to NetEase about a possible six month extension to their partnership, while “exploring a reasonable and long-trm path forward in the China region.”<ref>Archimtiros. (2023, January 18). Blizzard china update - extension denied, Netease dissolves Blizzard team. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/blizzard-china-update-extension-denied-netease-dissolves-blizzard-team-331010  
 
On January 19, 2023 Blizzard released a lengthy statement stating that they re-sought to NetEase about a possible six month extension to their partnership, while “exploring a reasonable and long-trm path forward in the China region.”<ref>Archimtiros. (2023, January 18). Blizzard china update - extension denied, Netease dissolves Blizzard team. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/blizzard-china-update-extension-denied-netease-dissolves-blizzard-team-331010  
 
</ref> The release ends with notes on that Blizzard is continuing to search for a new local licensing partner, saying they “have started talks with a number of potential partners who share our player-first values.”<ref>Archimtiros. (2023, January 18). Blizzard china update - extension denied, Netease dissolves Blizzard team. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/blizzard-china-update-extension-denied-netease-dissolves-blizzard-team-331010  
 
</ref> The release ends with notes on that Blizzard is continuing to search for a new local licensing partner, saying they “have started talks with a number of potential partners who share our player-first values.”<ref>Archimtiros. (2023, January 18). Blizzard china update - extension denied, Netease dissolves Blizzard team. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/blizzard-china-update-extension-denied-netease-dissolves-blizzard-team-331010  
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</ref> NetEase rejected the extension deal and posted a fiery response to clarify that they are not at fault for the breakdown of negotiations. NetEase listed a number of financial and intellectual property disputes that contributed to the failed negotiations, and condemned the fact that Blizzard was negotiating with other companies on a three-yera contract period. They stated, “considering the non-reciprocity, unfairness and other conditions attached to the cooperation, therefore, the parties could not reach an agreement in the end.”<ref>网易公司就《暴雪对国服玩家社区的更新说明》的说明. 微信公众平台. (n.d.). Retrieved January 27, 2023, from https://mp.weixin.qq.com/s/J5-YM7_-s2ZumohzbZUYUQ  
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</ref> The post amassed nearly 40,000 comments, with many harshly criticising Blizzard for their alleged recklessness. “It’s too late to act regretful. If you really cared about players, you could have planned things out more carefully,” a Weibo user [https://thechinaproject.com/2023/01/26/activision-blizzard-and-neteases-feud-explained/v commented]. NetEase rejected the extension deal and posted a fiery response to clarify that they are not at fault for the breakdown of negotiations. NetEase listed a number of financial and intellectual property disputes that contributed to the failed negotiations, and condemned the fact that Blizzard was negotiating with other companies on a three-year contract period. They stated, “considering the non-reciprocity, unfairness and other conditions attached to the cooperation, therefore, the parties could not reach an agreement in the end.”<ref>网易公司就《暴雪对国服玩家社区的更新说明》的说明. 微信公众平台. (n.d.). Retrieved January 27, 2023, from https://mp.weixin.qq.com/s/J5-YM7_-s2ZumohzbZUYUQ  
 
</ref>
 
</ref>
  

Revision as of 19:59, 12 February 2023

Blizzard & NetEase drama

Overview

Blizzard Entertainment has had licensing agreements with NetEase since 2008, covering the publication of Blizzard games in China on a separate server. After failing to reach a consensual deal, the two companies did not renew the contract at the end of 2022, ending the 14-year partnership[1]. Starting from the 23rd of January, 2023, millions of gamers in China can no longer enjoy Blizzard franchises. That includes the following games[2]:

  • Overwatch
  • Hearthstone
  • World of Warcraft
  • Diablo
  • Starcraft
  • Heroes of the Storm

Blizzard games going offline in China is not only a dispute between two industry leads on the opposite sides of the globe, but it also means erasing progress data that players have been investing in for years. Many devotees of the popular game took to social media networks to bemoan the loss, including mainstream celebrities such as Joker Xue, who posted on Weibo saying “Don’t know what the hell Bobby Kotick is doing, but Blizzard is still the best real-time strategy creator in my heart. I also believe it will come back. I hope we can still meet in the lost temple and big game hunters. Goodbye young us…” (machine-translated). “Knowing that the split is set in stone, I’m still deeply saddened by how things ended,” a Weibo user wrote, adding a series of crying emojis. “Playing WoW with my homies was such a major part of my childhood and adolescence. These are memories I’ll forever cherish,” another person commented. Sentiments like this are prevalent as many uncertainties are still in the air.

Background

Under Chinese law, all digital games are required to receive a license from authorities in order to be distributed locally and fully monetized. Because non-Chinese entities can’t submit games to Chinese regulators for review, foreign publishers have to team up with local companies if they want to introduce games to the Chinese market. [3]

The Dissolution

Blizzard Side

In 2019, Blizzard suspended a professional Hearthstone player named Ng Wai Chung from play for a year and forced him to forfeit tournament winnigs in the Hearthstone Grandmasters Tournaments. Around the same time, one of the largest series of political demonstrations were taking place in Hong Kong, where people cried for the Chinese Communist Party to not intervene with the political system in Hong Kong. During a Taiwan Hearthstone stream interview, Chung expressed his stance to “liberate Hong Kong”, which would be deliberately going against the goal of the Chinese Communist Party [4]. Blizzard banning Chung indicates that they sided themselves with the CCP, which created a lot of controversies surrounding Blizzard’s relationship with Chinese censors.

Blizzard’s reputation has also taken a down turn in recent years. In July 2021, a lawsuit against Blizzard began with employees protesting against the company’s poor handling of ongoing sexual harassment allegeations. “For years, Activision Blizzard’s open ‘frat boy’ environment fostered rampant sexism, harassment and discrimination with 700 reported incidents occurring under CEO Robert Kotick’s watch,” the lawsuit explains[5]. “The sexual misconduct was often committed by executives and in the presence of HR.” A report from the Wall Street Journal last year found that the CEO knew for years about rampant sexual harassment at the company, but failed to act.

Not long after the lawsuit began, on January 18, 2022, American tech giant Microsoft announced that they plan to acquire Blizzard for $68.7 billion in cash. If approved by regulatory and shareholders, it will be the largest vide game acquisition in history, making Blizzard, among with its other merged sectors, be under the Xbox Game Studios brand. There are theories saying Microsoft may have intervened in the Blizzard-NetEase negotiations, since the official merge would come soon after the supposed contract renewal. On Feburary 8, 2023, the CEO of Activision Blizzard, Bobby Kotick went on CNBC to ease UK regulators’ reluctance to approve the Microsoft acquisition. “Sony Studios goes back 80 years. Nintendo has the very best characters that exist in video games. I think [European regulators] are a little confused about where competition is today. The best companies in the world right now are companies like Tencent and ByteDance. And these are all companies that have protected markets. We struggle to enter the Japanese market, we can’t enter the Chinese market without a joint venture partner. The competition isn’t actually European companies and American companies, it’s really those companies in Japan and China.” [6] Kotick wanted to give the impression that U.S. and Europe are united against the two entirely different nations of China and Japan, and ultimately, keep the market dominance within the white nations.

Between Blizzard & NetEase

In Activitsion Blizzard’s 2021 Third Quarter Financial Results Report Report, their long-term publishing partner NetEase’s name was not mentioned in the document, but replaced with “a third party covering the publication of several Blizzard titles in China”[7]. The China market was noted to be only 3% of Activision Blizzard’s consolidated net revenues, which can come off as downplaying NetEase’s contribution, creating adverse sentiments[8]. The report also prophesied that “regarding the renewal of [the] agreements [expiring in January 2023], a mutually-satisfactory deal may not be reached.”[9] The relationship between the two companies was already at tense back then.

On November 16 2022, Blizzard announced in a press release that it will be suspending most Blizzard game services in mainland China due to expiration of the current licensing agreements with NetEase on January 2023[10]. Soon after, NetEase issue their own announcement, saying it has been doing its best to negotiate with Activition Blizzard, hoping to advance the contract renewal.

On January 19, 2023 Blizzard released a lengthy statement stating that they re-sought to NetEase about a possible six month extension to their partnership, while “exploring a reasonable and long-trm path forward in the China region.”[11] The release ends with notes on that Blizzard is continuing to search for a new local licensing partner, saying they “have started talks with a number of potential partners who share our player-first values.”[12] The post amassed nearly 40,000 comments, with many harshly criticising Blizzard for their alleged recklessness. “It’s too late to act regretful. If you really cared about players, you could have planned things out more carefully,” a Weibo user commented. NetEase rejected the extension deal and posted a fiery response to clarify that they are not at fault for the breakdown of negotiations. NetEase listed a number of financial and intellectual property disputes that contributed to the failed negotiations, and condemned the fact that Blizzard was negotiating with other companies on a three-year contract period. They stated, “considering the non-reciprocity, unfairness and other conditions attached to the cooperation, therefore, the parties could not reach an agreement in the end.”[13]

NetEase Cutting Ties - Literally

In response to the incident, the NetEase social media team hosted a live stream for 30,000 people where employees destroyed a Blizzard statue outside their Blizzard office, as a part of dismantling the work[14]. During the livestream, they also showcased the newest drink available at their coffee station: the Blizzard “Green Tea”[15], which is a modern Chinese slur referring to a manipulative person who tries to appear wholesome, innocent, or traditional, but is decidedly not so.

While Chinese social media may play a different set of rules than Western brands do online, calling their past partner a derogatory slur and racking their physical representations clearly marks the “breakup” unsavlagable.

Ethical Implication

After the decision to end the partnership came to light, in a letter to users in December, 2022 (machine translated), John Hight, general manager of Blizzard’s Warcraft franchise, said the team was “working hard to develop a function that will allow you to save your game characters, props, and progress.”[16] The company tried to reassure players that they won’t lose how far they have gone in the game. However, as the date came closer to the shutdown, many players were still struggling with the tool trying back up their data. Blizzard failed to make sure the players’ years of digital lives in Warcraft are safely archived. NetEase spectated this issue and responded to disappointed players saying the tool was unilaterally developed by Blizzard, such as it wasn’t tested by NetEase for security reasons, denying any responsibility regarding the loss of progress data[17].

The situation not only adversely affect players in the region, but also staffs. The ~100 person team that maintained the various services on Blizzard’s behalf is being rapidly downsized. There will only be a 10-people skeleton group remaining to take care of technical support and customer service relating to the switch off, but they don’t expect to be there longer than 6 months[18]. The rest of the employees will be either laid off or transferred to a different team within NetEase.

The sudden announcement of the contract coming to an end caught both players and staffs off guard. They have to react hastily to obtain their needs — for players, their game data; for staffs, their jobs and wages. Between the official announcement of extension denial and the shutdown date, Blizzard only gave these stakeholders less than two weeks to scrape everything together, including its internal engineers to develop an archival system for the Chinese players to back up their Warcraft data. The switch-off was messy and stress-inducing due to the short amount of time given. From a utilitarian perspective, providing a larger time frame between ending the contract and shutting down the games could make the transition smoother for all.

Source Cited

  1. ↑ Toh, M. (2022, December 14). Blizzard tells China's 'World of warcraft' fans to back up data as it seeks new partner | CNN business. CNN. Retrieved January 27, 2023, from https://www.cnn.com/2022/12/14/tech/blizzard-netease-transition-world-of-warcraft-china-intl-hnk/index.html
  2. ↑ Toh, M. (2022, December 14). Blizzard tells China's 'World of warcraft' fans to back up data as it seeks new partner | CNN business. CNN. Retrieved January 27, 2023, from https://www.cnn.com/2022/12/14/tech/blizzard-netease-transition-world-of-warcraft-china-intl-hnk/index.html
  3. ↑ Yuanyuan, Z. (2023, January 27). Activision Blizzard and Netease's Feud, explained. The China Project. Retrieved February 10, 2023, from https://thechinaproject.com/2023/01/26/activision-blizzard-and-neteases-feud-explained/
  4. ↑ Clark, P. A. (2019, October 21). What to know about the esports backlash to Blizzard over Hong Kong. Time. Retrieved February 5, 2022, from https://time.com/5702971/blizzard-esports-hearthstone-hong-kong-protests-backlash-blitzchung/
  5. ↑ Silberling, A. (2022, October 13). Activision Blizzard is once again being sued for sexual harassment. TechCrunch. Retrieved February 12, 2023, from https://techcrunch.com/2022/10/13/activision-blizzard-is-once-again-being-sued-for-sexual-harassment/
  6. ↑ YouTube. (2023, February 7). Activision Blizzard CEO explains why Tencent and ByteDance are the best companies in the world. YouTube. Retrieved February 12, 2023, from https://www.youtube.com/watch?v=QMhgIxo1Xi0
  7. ↑ Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial
  8. ↑ Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial
  9. ↑ Activision Blizzard announces Third Quarter 2022 financial results. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/activision-blizzard-announces-third-quarter-2022-financial
  10. ↑ Blizzard Entertainment and Netease suspending game services in China. Activision Blizzard. (n.d.). Retrieved January 27, 2023, from https://investor.activision.com/news-releases/news-release-details/blizzard-entertainment-and-netease-suspending-game-services
  11. ↑ Archimtiros. (2023, January 18). Blizzard china update - extension denied, Netease dissolves Blizzard team. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/blizzard-china-update-extension-denied-netease-dissolves-blizzard-team-331010
  12. ↑ Archimtiros. (2023, January 18). Blizzard china update - extension denied, Netease dissolves Blizzard team. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/blizzard-china-update-extension-denied-netease-dissolves-blizzard-team-331010
  13. ↑ 网易公司就《暴雪对国服玩家社区的更新说明》的说明. 微信公众平台. (n.d.). Retrieved January 27, 2023, from https://mp.weixin.qq.com/s/J5-YM7_-s2ZumohzbZUYUQ
  14. ↑ Archimtiros. (2023, January 18). Netease response to Blizzard Entertainment - local orc statue torn down. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/netease-response-to-blizzard-entertainment-local-orc-statue-torn-down-331041
  15. ↑ Archimtiros. (2023, January 18). Netease response to Blizzard Entertainment - local orc statue torn down. Wowhead. Retrieved January 27, 2023, from https://www.wowhead.com/news/netease-response-to-blizzard-entertainment-local-orc-statue-torn-down-331041
  16. ↑ Toh, M. (2022, December 14). Blizzard tells China's 'World of warcraft' fans to back up data as it seeks new partner | CNN business. CNN. Retrieved January 27, 2023, from https://www.cnn.com/2022/12/14/tech/blizzard-netease-transition-world-of-warcraft-china-intl-hnk/index.html
  17. ↑ Toh, M. (2022, December 14). Blizzard tells China's 'World of warcraft' fans to back up data as it seeks new partner | CNN business. CNN. Retrieved January 27, 2023, from https://www.cnn.com/2022/12/14/tech/blizzard-netease-transition-world-of-warcraft-china-intl-hnk/index.html
  18. ↑ Batchelor, J. (2023, January 16). Netease reportedly disbands team behind Blizzard Games in China. GamesIndustry.biz. Retrieved January 27, 2023, from https://www.gamesindustry.biz/netease-reportedly-disbands-team-behind-blizzard-games-in-china
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