Microsoft Could Get Boost From NetEase Deal Returning 'StarCraft' and Other Games to China

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Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published April 10, 2024
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KEY TAKEAWAYS

  • Blizzard Entertainment games including "StarCraft" and "World of Warcraft" among others will return to the Chinese market after a deal between NetEase and Microsoft.
  • The agreement ended an intellectual property feud between NetEase and Blizzard Entertainment parent Activision Blizzard, which is owned by Microsoft after completing its $68.7 billion acquisition last October.
  • Separately, Microsoft and NetEase also agreed to look at ways to get more titles on Microsoft's Xbox console and other platforms.

Microsoft (MSFT) and NetEase (NTES) announced a renewed publishing deal that would bring "World of Warcraft" and other popular video games back to China. 

The agreement ends a feud over intellectual property rights between NetEase and Activision Blizzard-owned Blizzard Entertainment, which is owned by Microsoft after completing its $68.7 billion acquisition last October. The original collaboration had run for 15 years before falling out last year. 

The companies said popular Blizzard Entertainment titles, including the “Warcraft” and "Diablo" franchises, would return to the world's largest gaming market sequentially, beginning this summer.

Microsoft Gaming CEO Phil Spencer said that returning Blizzard games to China along with exploring new ways to expand the number of titles available on Xbox demonstrates the company's "commitment to bringing more games to more players around the world.”

Jefferies analysts said the deal could be positive for gaming revenue and momentum in PC games.

Separately, NetEase and Microsoft entered into an agreement that would look into bringing new NetEase titles to Microsoft’s Xbox consoles and other platforms.

"NetEase games titles being explored to be brought under Xbox consoles and other platforms is incrementally positive" for the China-based developer and operator of online games, Jefferies added.

American depositary receipts (ADRs) of NetEase and Microsoft shares declined intraday Wednesday. Microsoft shares were down 1.2% to $421.09 as of 1 p.m. ET, while NetEase ADRs were 1.6% lower at $98.99.

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  1. Business Wire. "Blizzard Entertainment and NetEase Renew Agreement to Bring Beloved Titles Back to China; Microsoft Gaming, NetEase Enter Broader Collaboration."

  2. Securities and Exchange Commission. "FORM 8-K."

  3. Reuters. "China's video games market recovers in 2023, domestic sales surpass $42.6 bln."

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