Blizzard was reportedly sued by former Chinese partner after messy breakup

Blizzard Entertainment is reportedly being sued by former Chinese publishing partner NetEase after servers shutdown in January when the two failed to reach a continuation agreement. NetEase is seeking ¥300 million Yuan (roughly $43.5 million) in damages, which the company says will be put toward issuing refunds for discontinued games and recouping investments from unsold merchandise inventory.

The suit has multiple components. NetEase says Blizzard was supposed to handle customer refunds with regard to discontinued games and that it got stuck with the bill. NetEase also alleges that the original contract was worded in such a way as to grant Blizzard “unequal terms and conditions” in favor of the publisher’s “unilateral rights,” as reported and translated by MMO-focused gaming website Wowhead. A representative from Blizzard’s parent company Activision told Engadget that it has yet to see any formal paperwork announcing the lawsuit and said that NetEase is “contractually responsible” for refunds and anything else that falls under the “operations” umbrella.

NetEase also alleges that it provided Blizzard with a large advance to make future titles. The Chinese developer says that not only were these titles never finished or released, but that Blizzard never returned any of the seed money. Again, Activision had no comment as it has not seen the suit. 

Blizzard and NetEase were successful partners for the past 14 years before negotiations broke down to renew the long-term licensing agreement. This led to a complete cessation of all Blizzard games and services in the region, including popular properties like World of Warcraft, Overwatch 2, Starcraft and Diablo III, among others. Millions of Chinese players lost access to their accounts and related data. Some started fresh with new accounts in other regions, but most (112 million people) opted for a refund.

The agreement did not end amicably, with reports of NetEase staffers tearing down the Blizzard offices and livestreaming the destruction of a World of Warcraft statue. NetEase's president of global investment and partnership, Simon Zhu, also seemed to call out a high-ranking Blizzard staffer as a “jerk” in a LinkedIn post. Now there’s an alleged lawsuit to add even more fuel to the fire. This is a developing story so we will update this post when and if Activision/Blizzard receives a copy of the lawsuit.

Update, 4/24/23, 3:30PM ET: This story and its headline have been updated to indicate that this lawsuit hasn't been confirmed yet, as Activision itself nor Engadget has seen a copy of the lawsuit yet.

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