Blizzard Entertainment and NetEase suspend gaming services in China

IRVINE, Calif.–(COMMERCIAL THREAD)–Blizzard Entertainment, Inc. today announced that it will suspend most of Blizzard’s gaming services in mainland China due to the expiration of current licensing agreements with NetEase, Inc. on January 23, 2023. This includes World of Warcraft®, Hearth stone®, Warcraft® III: Reforged, Overwatch®, the Spaceship® series, Devil III®And Heroes of the Storm®. Immortal devil® co-development and publication are covered by a separate agreement between the two companies.

Blizzard Entertainment has had licensing agreements with NetEase since 2008, covering the publication of these Blizzard titles in China. The two sides have not reached an agreement to renew the agreements that is consistent with Blizzard’s operating principles and commitments to players and employees, and the agreements will expire in January 2023.

We will be pausing new sales in the coming days and Chinese players will soon receive details on how this will work. Upcoming releases for World of Warcraft: Dragon Flight, Hearthstone: March of the Lich King, and the second season of Surveillance 2 will proceed by the end of the year.

“We are immensely grateful for the passion our Chinese community has shown during the nearly 20 years that we have brought our games to China through NetEase and other partners,” said Mike Ybarra, president of Blizzard Entertainment. “Their enthusiasm and creativity inspire us and we are looking for alternatives to bring our games back to gamers in the future.”

About Blizzard Entertainment, Inc.

Best known for iconic video game universes including Warcraft®Watch over®Devil®and StarCraft®, Blizzard Entertainment, Inc. (www.blizzard.com), a division of Activision Blizzard (NASDAQ: ATVI), is a leading developer and publisher of entertainment experiences. Blizzard Entertainment has created some of the most critically acclaimed and genre-defining games over the past 30 years, with a track record that includes multiple Game of the Year awards. Blizzard Entertainment engages tens of millions of gamers worldwide with titles available on PC through Battle.net®Xbox, PlayStation, Nintendo Switch, iOS and Android.

Cautionary Note Regarding Forward-Looking Statements: Statements contained herein that are not historical facts are forward-looking statements including, but not limited to statements of our plans and objectives, including those relating to the release of products or services. Activision Blizzard, Inc. generally uses words like “prospect”, “forecast”, “will”, “could”, “should”, “would”, “be”, “plan”, “aim”, “believe,” ” can”, “could”, “expects”, “intends”, “seeks”, “anticipates”, “estimates”, “future”, “positioned”, “potential”, “project”, “remains”, “planned “, “set to”, “subject to”, “imminent” and negative versions of these words and other similar words and phrases to help identify forward-looking statements. Forward-looking statements are subject to business and economic risks, reflect management’s current expectations, estimates and projections about our business, and are inherently uncertain and difficult to predict.

We caution that a number of important factors, many of which are beyond our control, could cause our actual future results and other future circumstances to differ materially from those expressed in any forward-looking statements. Such factors include, but are not limited to: the anticipated effect of the expiration of the agreement with NetEase, Inc.; the effect of the announcement or pending proposed transaction with Microsoft Corporation (“Microsoft”) on our business relationships, results of operations and general business; risks that the proposed transaction with Microsoft will disrupt our current plans and operations and potential employee retention difficulties as a result of the proposed transaction with Microsoft; the global impact of the ongoing COVID-19 pandemic and other macroeconomic factors (including, without limitation, the potential for significant short- and long-term global unemployment and economic weakness and the resulting impact on global discretionary spending; potential strain on resellers, distributors and manufacturers who sell our physical products to customers and platform providers on whose networks and consoles some of our games are available; effects on our ability to release our content in a timely manner and with effective quality control; effects on our ability to prevent cybersecurity incidents while our workforce is dispersed; effects on the operations of our professional esports leagues; and macroeconomic impacts resulting from the long duration of the COVID-19 pandemic, including labor shortages and supply chain); our ability to consistently deliver high-quality, popular titles in a timely manner, which has been made more difficult due to the COVID-19 pandemic; our ability to attract, retain and motivate qualified personnel; risks and uncertainties of doing business outside the United States (the “US”), including the need for regulatory approval to do business; risks related to the behavior of our distributors, resellers, development and licensing partners or other affiliated third parties that may harm our brands or business operations; our reliance on third-party proprietary tools and technologies; interruptions, disruptions or degradations of our services, products and/or technology infrastructure; data breaches, fraudulent activity and other cybersecurity risks; increase regulation in key territories; regulation relating to the Internet, including the potential harm from laws affecting “net neutrality”; data privacy regulation, including China Personal Data Protection Law; insolvency or business bankruptcy of any of our business partners, which has been magnified due to the COVID-19 pandemic; and the other factors included in Part I, Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2021, filed with the United States Securities and Exchange Commission.

The forward-looking statements contained herein are based on information available to Activision Blizzard, Inc. as of the date of this filing, and we undertake no obligation to update any such forward-looking statements. Actual events or results may differ from those expressed in the forward-looking statements. Therefore, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained herein primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, outlook, strategy and financial needs. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and could cause actual results to differ materially from current expectations.

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