Yahoo Finance Microsoft (MSFT), NetEase to Bring Back Blizzard Games in China
Microsoft MSFT has announced that beloved video game franchises from Blizzard Entertainment that captured the hearts of millions in China will soon be making a comeback under a new publishing agreement with NetEase NTES.
After a year of discussions, Blizzard Entertainment and Chinese Internet giant NetEase revealed that they have reached a deal to once again bring hugely popular titles like World of Warcraft, Hearthstone and games from the Warcraft, Overwatch, Diablo and StarCraft universes back to players in mainland China.
The renewed partnership builds on more than 15 years of previous collaboration between the two companies. NetEase was the publisher of Blizzard games in China from 2008 to 2023.
A number of Blizzard games were taken offline in China in January 2023 after the developer terminated the partnership with NetEase citing disagreement over intellectual property control. The pair subsequently sued each other. Tension eased after Microsoft acquired Activision Blizzard in October, which was followed by changes in management.
While the timing and further details are still to be announced, the renewed agreement will allow Chinese players to regain access to games they previously enjoyed under the prior deal before it lapsed.
Separately, Microsoft Gaming and NTES also announced an agreement to explore bringing new NetEase titles to Xbox consoles and other platforms as part of MSFT's commitment to bringing more games to more players around the world.
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Microsoft Teases Next-Generation Xbox Plans Amid Struggles
Microsoft recently revealed the formation of a new team working on preserving Xbox's current library of games for future hardware, highlighting its importance to both Xbox and the gaming industry.
Shares of this Zacks Rank #3 (Hold) company have gained 12.9% year to date compared with the Zacks Computer and Technology sector’s growth of 11.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Microsoft teased its plans for next-generation Xbox hardware back in February, claiming that it was focused on delivering the largest technical leap for a new console generation with the next Xbox.
Game preservation has become an increasingly pressing issue in recent years due to the prevalence of online requirements and digital formats. Many modern games, particularly live service titles, are unplayable without an Internet connection and risk disappearing permanently when servers are shut down.
MSFT's commitment to game preservation aligns with its strong track record of backward compatibility. The Xbox 360 backward compatibility program, which allows players to enjoy hundreds of popular Xbox 360 games on Xbox One and Xbox Series X|S consoles, remains one of the platform's most beloved features.
Microsoft's identity as a platform owner has come under the strain of late as Xbox Series S/X console sales lag far behind Sony's SONY PS5 and Nintendo NTDOY Switch.
Its decision to release some Xbox exclusive titles on PS5 and Nintendo Switch and a sore lack of triple-A exclusives on its own platform has left the company in a perceivably weakened position in the console market.
Microsoft, however, boasts a strong portfolio of game studios, especially since its successful acquisition of Call of Duty maker Activision Blizzard last year in a $69 billion deal that set a record for takeovers in the video game industry. The combined entity ranks No. 3 among global games publishers, behind Tencent Holdings and Sony.
The launch of Diablo IV on Xbox Game Pass has quickly made Xbox the game's most popular platform. Additionally, MSFT is preparing for the upcoming releases of highly anticipated titles, such as Hellblade II, Avowed and Indiana Jones and the Great Circle, which are likely to bring much needed wind in Xbox's sails.
While Microsoft has not revealed a launch window for the next generation of Xbox consoles, court documents from the FTC trial in June last year revealed that the company expects the next-generation Xbox and PS6 to launch in 2028.
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