Microsoft Scores Big Win Bringing Diablo IV and Other Videogames Back to China -- Barrons.com

Dow Jones04-10

By Adam Clark

Blizzard Entertainment has reached an agreement with China's NetEase to bring its videogame titles back to the mainland Chinese market this summer. It's a boost for Microsoft, the new owner of Blizzard.

The deal means franchises including World of Warcraft, Diablo and StarCraft, will return to China, the world's largest gaming market, according to a statement by Microsoft Gaming and NetEase on Wednesday.

U.S.-listed shares of NetEase were up 0.9% at $101.50 in premarket trading. Microsoft shares were down 0.2%.

Blizzard has operated since 2008 in China but failed to reach an agreement with Chinese publisher NetEase over an extension to their partnership beyond January 2023.

Meanwhile, Microsoft acquired Activision Blizzard in a $69 billion purchase which was history's largest technology deal. That looks to have helped ease negotiations, although no financial details of the deal were disclosed.

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

"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.

Around 3% of Activision Blizzard's revenue came from China in 2021, while NetEase said at the time of the end of their previous deal that Blizzard games represented a low-single-digit share of its revenue and income.

"Any near-term financial impact to 2024 is likely to be limited. Instead, we view this as a positive testament to NetEase's operational strength," Citi analyst Alicia Yap wrote in a research note.

Yap has a Buy rating and $138 target price on NetEase stock.

Write to Adam Clark at adam.clark@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

April 10, 2024 07:54 ET (11:54 GMT)

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Microsoft Scores Big Win Bringing Diablo IV and Other Videogames Back to China -- Barrons.com

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