NetEase files lawsuit against Blizzard to get back millions of dollars for refunds

Another consequence of Blizzard’s exit from China

Update (26.04.2023): Activision has given the following statement regarding the lawsuit by NetEase:

“We haven’t received the lawsuit yet, but we are confident we aren’t in breach of any licensing agreements. The terms NetEase appears to be complaining about reflect standard industry practice and have been mutually-beneficial for years. We have enjoyed nearly two decades of positive experiences operating in China, and remain committed to serving players and protecting their interests.”

In fact, it seems like NetEase aren't even the ones bringing a lawsuit against Blizzard, but a frustrated Chinese gamer is: The confusion seems to stem from mistakes being made by the courthouse, which wrongly associated a man named Yang Jun, who filed the lawsuit, with NetEase.

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Original (25.04.2023): Almost all games by Activision Blizzard went dark in China on January 23, 2023, because the company was unable to renew the licensing agreement with NetEase, its Chinese distribution partner. The divorce between the two companies was reportedly caused by Activision’s Bobby Kotick, who felt threatened by NetEase executives during the negotiations about continuing the long-standing relationship between Blizzard and NetEase. This misunderstanding led to Kotick axing the negotiations, which in turn meant that Blizzard was left without a distribution partner.

Foreign companies are not allowed to distribute games on the Chinese market without having such an agreement with a local company, so Blizzard had to shut down its games there. The only exception to this is Diablo Immortal, which was co-developed with NetEase in a separate agreement, which is still in force.

The manner in which the companies divorced left a bitter taste in the mouths of many Chinese gamers, who now find themselves without easy access to their favorite video games. Naturally, many of them sought refunds for Blizzard’s games after they deactivated their service. It seems like NetEase has granted these in up to 1.12 million cases so far, which cost the company ¥300 million Yuan – around $43.5 million USD – according to Sina Technology (via WoWHead).

NetEase reportedly wants to get that money back from Blizzard, stating that refunding players should have been the company’s obligation in the first place, hence the lawsuit filed in Shanghai.

The Chinese company is also demanding that Blizzard return a deposit made by NetEase for “several games in advance” of their release (those are obviously not happening anymore), which Blizzard has not yet given back.

Blizzard’s Chinese divorce keeps getting more complicated – and it’s not over just yet.

Blizzard’s China divorce is an ugly one