Report that Activision Blizzard suddenly terminated the long-term partnership with Netease for 14 years due to ``translation error by interpreter''

In November 2022, Activision Blizzard abruptly ended its 14-year partnership with Netease, a Chinese game company responsible for localizing and publishing its titles in China. The New York Times reports that the cause of this relationship breakdown is 'translation error by interpreter'.

Rift Between Gaming Giants Shows Toll of China's Economic Crackdown - The New York Times
https://www.nytimes.com/2023/03/29/technology/activision-netease-china-breakup.html

Activision's decision to pull out of China stemmed from a comment that was lost in translation | TechSpot
https://www.techspot.com/news/98129-activision-decision-pull-out-china-stemmed-comment-lost.html

Blizzard's games were reportedly pulled from China after Activision felt NetEase 'threatened' Bobby Kotick | VGC
https://www.videogameschronicle.com/news/blizzards-games-were-reportedly-pulled-from-china-after-activision-felt-netease-threatened-bobby-kotick/

Activision boss Bobby Kotick reportedly felt 'threatened' by NetEase CEO | Eurogamer.net
https://www.eurogamer.net/activision-boss-bobby-kotick-reportedly-felt-threatened-by-netease-ceo

Activision Blizzard And NetEase Breakup Came After Bobby Kotick Felt 'Threatened' - Report - GameSpot
https://www.gamespot.com/articles/activision-blizzard-and-netease-breakup-came-after-bobby-kotick-felt-threatened/1100-6512792/

Activision Blizzard Left China Over Messy Miscommunication
https://kotaku.com/activision-blizzard-china-netease-microsoft-warcraft-1850278516

In November 2022, Blizzard Entertainment, a subsidiary of Activision Blizzard, announced that its license agreement with NetEase could not be renewed.

Blizzard and NetEase are afraid that Chinese people will not be able to play 'Overwatch, Diablo III, Warcraft', etc., and NetEase executives will say 'stupid' - GIGAZINE

As a result, from January 23, 2023, popular titles such as Overwatch 2, World of Warcraft and Diablo will no longer be playable in China. It is estimated that this has prevented millions of Chinese players from accessing the game.

Chinese gamers are locked out of Blizzard games such as 'Overwatch' and 'WoW', due to Chinese companies refusing to extend license agreements-GIGAZINE

by Instacodez

According to a document independently obtained by The New York Times from an anonymous insider, the reason for the breakdown of the relationship between Activision Blizzard and Netease was a 'translation error'. According to the document, Activision Blizzard and Netease used the online conferencing tool Zoom to negotiate the renewal of the partnership agreement. An interpreter was present at this online meeting to translate English and Chinese, and a discussion was held on strict regulations on Chinese games.

At the time of negotiations, Netease CEO William Ding told Activision Blizzard CEO Robert Kotick that he wanted a licensing deal rather than a normal sales partnership. The reason why Netease sought conditions that expected higher profitability than previous partnerships was that Netease's stock valuation had fallen by more than $ 60 billion (about 8 trillion yen) due to game-related regulations that continue to strengthen in China. is.

Although Kotik was willing to accept this proposal, he put the contract on hold, considering the possibility that this license agreement could adversely affect investigations from regulatory authorities around the world following Microsoft's acquisition of Activision Blizzard . When Kotik CEO conveyed concerns about the license agreement, Din said through an interpreter that ``Netease can move Chinese regulators to prevent or allow acquisitions by Microsoft.'' Activision Blizzard seems to have taken this as a threat that ``If you do not sign a license agreement with Netease, you will work with Chinese regulators on the acquisition by Microsoft.''

After that, Activision Blizzard agreed to the license agreement, but said that the installment payment of the license fee is ``only if an advance payment of about 500 million dollars (about 66 billion yen) is made''. Activision Blizzard explains that the reason for asking for advance payment is a self-defense measure against the potential danger that the company's title will be licensed by the government or copied without permission. However, Netease decided that this amount was 'commercially illogical', so the partnership between the two collapsed.

According to sources, Ding's threat was not actually a threat, but a suggestion to avoid Chinese government regulations and proceed smoothly with business. Ding's remarks are a warning that ``If Microsoft does not move to a license agreement, it may face regulatory obstacles in China after Microsoft acquires Activision Blizzard,'' due to a translation error by an interpreter. It seems that it was received by Activision Blizzard as wrong content. If Netease can obtain a license, it seems that Activision Blizzard's title can be released from the bureaucracy associated with game publishing in China, and the explanation is 'To Chinese regulators about the acquisition by Microsoft. It seems that I was mistakenly told that I will work.

It is unclear whether Activision Blizzard and Netease management have discussed this misunderstanding. According to The New York Times, Activision Blizzard is interested in re-entering the Chinese market, but is seeking partnerships with other companies and does not seem to be sticking to repairing relations with Netease. ByteDance, the parent company of Tencent and TikTok, is said to be interested in a contract to publish Activision Blizzard titles in China.