By Jiahui Huang

Blizzard Entertainment will collaborate with China's NetEase to bring its blockbuster game titles back to the mainland Chinese market this summer, renewing a partnership that ended more than a year ago.

The renewed deal includes Blizzard games "World of Warcraft," "Heathstone," and other titles in the "Warcraft," "Overwatch," "Diablo" and "StarCraft" universes, according to a statement by the U.S. videogame giant, Microsoft Gaming and NetEase on Wednesday.

The detailed relaunch plans will be shared at a later date, the companies said.

NetEast's shares rose 2.0% to 160.60 Hong Kong dollars (US$20.51) in early trade after the news, taking gains to 14% so far this year.

Blizzard has been collaborating with NetEase since 2009, bringing its blockbuster titles to the world's largest video gaming market by revenue. The 14-year partnership ended in January 2023 and NetEase rejected a proposed extension of six months, calling the terms unequal and unfair.

"Returning Blizzard's legendary games to players in China while exploring ways to bring more new titles to Xbox demonstrates our commitment to bringing more games to more players around the world," said Phil Spencer, chief executive of Microsoft Gaming.

The deal renewal "would have limited financial impact on NetEase in the near term," Nomura analyst Jialong Shi told Dow Jones Newswires. Nomura estimates that Blizzard's games likely accounted for 4%-5% of NetEase's total revenue in 2022 before the partnership ended, Shi said.

Chinese regulators have increased scrutiny of the domestic gaming sector and have required foreign titles to only be published via local distributors. The National Press and Publication Administration said Monday that it has approved 46 imported game titles so far for this year, compared with 98 in 2023.

Separately, Microsoft Gaming and NetEase have also agreed to look into putting NetEase's game titles on Xbox consoles and other platforms.

"Given that NetEase currently has a small portfolio of console-ready titles, the immediate impact on earnings is limited," Morningstar equity analyst Ivan Su said, adding that the collaboration may potentially benefit NetEase's global expansion.

The Chinese video game publisher has developed some flagship titles such as the "Justice" mobile game and "Eggy Party" in recent years and its gaming sector gross profit margin rose 10.4 percentage points to 69.5% in 2023, driven by sales from self-developed games.

Blizzard Entertainment is a division of Activision Blizzard, which was acquired by Microsoft.

Write to Jiahui Huang at

(END) Dow Jones Newswires

04-09-24 2348ET