Update 4/25: It has since been clarified that NetEase isn’t the one suing Blizzard, but rather aChinese gamer named Yang Jun. Jun has actually sued NetEase in the past as well. It seems a filing error caused the confusion about who exactly was suing Blizzard.
Original story follows.
Blizzardis allegedly being sued by Chinese gaming company NetEase for a whopping $44 million. Last yearBlizzard was reported to leave Chinaover a publishing agreement failure. However, the latest, rumored lawsuit comes after a breakdown in negotiations between the two companies.
Any international corporations that plan to conduct operations in China must do so through an intermediate company approved by the government due to China’s tough regulations. According to the lawsuit, NetEase allegedly claims that whenWorld of Warcraftand other games went offlineon January 23, Blizzard promised to refund the more than 1 million players who requested them, but that responsibility fell to NetEase.
RELATED:Microsoft’s Activision-Blizzard Acquisition Could Be the Best Thing to Happen to Halo
NetEase is reportedly requesting reimbursement for the unsold inventory of goods and alleges that Blizzard broke license agreements, leading to an “unlevel playing field” for which compensation is needed. Reports allege NetEase has accused Blizzard of reneging on promises made to players and violating license agreements, resulting in financial losses for the company.
The lawsuit is said to mention “prevailing clauses” between NetEase andBlizzard. The wording of this agreement may also cover other goods for Chinese consumers, such as current goods that have been modified to comply with the notoriously severe registration requirements in that country. “Blizzard’s proposition, as well as its comments from today, are impolite, disrespectful, and defy common sense. It never took into account NetEase or gamers' interests," the company claimed in a statement.
The entire scenario is still unclear because NetEase reportedly hasn’t completed the lawsuit yet, which suggests that the two parties may reach a deal. Many speculate that the two will still reach a licensing arrangement, allowing Blizzard to resume operations and services in China. But given Blizzard’s history in China such as theDiabloand President Xi Jinping issue, it seems unlikely. Some of NetEase’s complaints in the lawsuit seem more obvious, such as the assertion that Blizzard “outright refused” to assume responsibility for refunding Chinese gamers and failed to pay a previously agreed-upon commission fee in connection with these reimbursements.
It remains to be seen how the situation will play out and whether Blizzard will be forced to pay the $44 million allegedly requested by NetEase.
