NetEase dismisses Activision proposal for temporary extension of ties By Reuters

By Josh Ye

HONG KONG (Reuters) -Chinese games publisher NetEase (NASDAQ:) Inc said on Wednesday it has rejected a proposal from Activision Blizzard Inc (NASDAQ:) to extend their long-time partnership for six months as the U.S. game developer looks for a new partner.

Blizzard said in November it would end its 14-year partnership with NetEase – a development that sent shockwaves across the industry as the partnership was widely seen as one of the most lucrative in video games.

The companies had been unable to agree on key terms of cooperation and hits such as ‘World of Warcraft’ will not be available in China from Jan. 23.

NetEase said Blizzard reached out last week with an offer to extend the partnership for six months but also made it clear that it would not stop negotiating with other potential partners.

“Considering the non-reciprocity, unfairness and other strict conditions attached to the cooperation, the parties could not reach an agreement in the end,” China’s second-largest gaming company said in a statement.

It called the proposal “rude and unreasonable, inappropriate and commercially illogical” and accused Blizzard of seeking to “take a free ride”.

Blizzard China said in a statement: “It is a pity that NetEase is not willing to extend services of our game for another six months on the basis of existing terms as we look for a new partner.”

With the demise of their partnership, Blizzard is currently without a Chinese publisher. Unlike other countries, foreign gaming companies typically need a Chinese publisher before they can release games in China.

NetEase rose to become a gaming giant partly by publishing Blizzard’s games in China. It has since accelerated its own game development capability, with in-house games now accounting for more than 60% of revenue.