Shanghai Wangzhiyi Network Technology, a subsidiary of Chinese internet company NetEase, recently filed a lawsuit against Blizzard Entertainment for violating a series of licensing agreements in Shanghai, demanding the latter to return 300 million yuan ($43.5 million) in arrears, according to a report by 36Kr on April 24.
According to a report by Yicai, this amount includes refunds related to games discontinued in the Chinese mainland such as “World of Warcraft” that Wangzhiyi has already fully paid, prepayments for unsold game inventory, and prepaid guarantees for several undeveloped games. The case also involves multiple unequal terms that favor Blizzard’s unilateral rights in the relevant agreements of games operated in China such as “World of Warcraft,” and there is controversy over the legality and enforceability of these terms.
The primary reason why Wangzhiyi sued Blizzard was that the American video game developer refused to bear the obligation of refunding Chinese players and refused to pay advance commission fees related to service refunds. Insiders said that after “World of Warcraft,” “Hearthstone,” “Overwatch,” and other Blizzard games were suspended from operating on China’s servers on January 24, Wangzhiyi had already fully refunded more than 1.12 million players.
Public information shows that Wangzhiyi, who initiated this lawsuit, is NetEase‘s local team responsible for operating Blizzard games. Previously, it was reported that this team had nearly one hundred employees with most being operational staff. Currently, only ten employees remain responsible for post-event work.
Earlier disputes between the two companies began on November 17, 2022, when both firms issued statements saying they failed to reach an agreement on renewing their cooperation through negotiations and would terminate their partnership after the agreement expired.
In a statement at the time, Blizzard said games including World Of Warcraft, WarCraft III: Reforged, Hearthstone, and Overwatch would stop operating in China from 0:00 on January 24, 2023.
On February 1, 2023, shortly after the operation suspension, Wangzhiyi issued a statement regarding refunds for Blizzard games. The statement clarified that players who have recharged but not used virtual currency or game services can apply for a refund for Blizzard game products operated by Shanghai Wangzhiyi in the Chinese mainland that are no longer operational. This policy was effective from 11 am on February 1.