Shares of NetEase (NASDAQ: NTES) were on a downward trajectory in pre-market trading on Thursday as the company announced that its licenses with Activision Blizzard’s (ATVI) Blizzard entertainment in the Chinese mainland will expire on January 23 next year. The Chinese Internet technology giant added that these licenses will not be renewed.
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The expiry of this license will mean popular Blizzard games including World of Warcraft, the StarCraft series, Hearthstone, Heroes of the Storm, Overwatch, and Diablo III will not be available on NetEase from next year onwards.
William Ding, CEO of NetEase commented, “We have put in a great deal of effort and tried with our utmost sincerity to negotiate with Activision Blizzard so that we could continue our collaboration and serve the many dedicated players in China. However, there were material differences on key terms and we could not reach an agreement.”
The company stated in its press release that games from Blizzard Entertainment represented a percentage in the low single digits of NetEase’s total net revenues and net income in the first nine months of 2022.
In addition, NTES also reported Q3 results with revenues of $3.4 billion, up 10.1% year-over-year but missing Street estimates by $80 million.
Adjusted earnings came in at $1.61 per ADS surpassing analysts’ estimates of $1.07 per ADS.
NetEase also declared a dividend of $0.4350 per ADS for the third quarter to holders of ordinary shares and holders of ADSs as of the close of business on December 2.
