The year 2023 marked a pivotal moment for the Chinese gaming industry as Blizzard's 14-year partnership with NetEase came to an abrupt end on January 23, 2023. Popular Blizzard games such as World of Warcraft, Hearthstone, Diablo III, and Overwatch: Return would no longer be available for mainland China players.
This isn't the first time Blizzard has faced such a predicament since their entry into China in 1997. However, what's alarming is that no one knows whether this is a temporary farewell or a permanent goodbye. In the past two decades, Blizzard has changed agents three times. The primary reason behind these changes is money. It's been widely reported that Blizzard increased its fees and profit-sharing ratio with every new agent. During the Jiucheng era, Blizzard received an annual agency fee of $13 million plus a 22% profit share. However, when Blizzard transferred the agency rights to NetEase, the annual agency fee skyrocketed five-fold to over $70 million, with the profit-sharing ratio increased to 55%.
Although $13 million seems like a staggering sum, Blizzard holds all the power in this scenario. After all, it possesses the core products, and even a Chinese internet behemoth like NetEase had no choice but to submit to Blizzard's demands. Despite Blizzard's financial statements indicating net revenue of $1.827 billion in 2021, NetEase's share of Blizzard's gaming revenue accounted for only about 14.5%.
It's worth noting that ultimately, it's the players who bear the brunt of the cost. Despite the seemingly mutual losses in this negotiation, the players end up suffering the most significant loss since they have no power to change anything, whether they agree or not. Next in line are NetEase's employees who have worked hard to manage and maintain the Blizzard games for the past 14 years, only to face a sudden end to their efforts. Finally, Blizzard may still reap profits from Europe, North America, Asia, and other regions despite its exit from China.
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As we look at the events between Blizzard and Netease, we can see that:
There is no reliable relationship between game operators and players. Once a game is taken down, the connection between players and game operators is lost.
The relationship between game operators and developers is always in a state of play rather than a true cooperative relationship.
This is a real problem that we've seen in the industry as we develop X WINNER, and we're trying to solve it through smart contract technology and better mechanisms.
As a decentralized game development platform, X WINNER doesn't operate games itself, but instead continuously develops various types of games for players in different regions to enjoy and for game operators with different capabilities to operate. Additionally, all players who join X WINNER through game operators' promotion or advertising will be directly bound to the game operator in a smart contract, ensuring that their data is permanently unalterable. No matter how many games X WINNER develops in the future, as long as players continuously participate in games, the game operators will be continuously making profits along the way. Game operators will cherish each player's retention and experience even more.
To solve the game operator and platform's game of interests, the principle of all benefit distribution will be written in the smart contract from the first day of the platform's creation and automatically executed by the smart contract, and no one has the right to change it. This avoids any space for malicious behavior and allows both parties to cooperate sincerely without considering any suspicion or distrust. It also allows them to work together for the benefit of the users.