The release of the "Online Game Management Measures (Draft for Soliciting Opinions)" last Friday caused a significant market downturn in almost all game-related sectors. Many view it as a harbinger of the gaming sector's collapse, reminiscent of the NetEase-Blizzard split at the end of last year.
Event Overview:
Blizzard, known for its high-quality games, partnered with NetEase after ending cooperation with JiuCeng in 2008. This golden duo collaborated until the end of 2022, often referred to as the "couple of the gaming industry." Rumors hinted at non-renewal, but it wasn't widely accepted until Blizzard China suddenly announced the contract's failure on November 17, 2022, terminating operations on January 24, 2023.
The confirmed rumor quickly impacted NetEase's stock price. Although NetEase has diversified its game portfolio beyond Blizzard titles, losing the full range still inflicted substantial damage.
NetEase swiftly responded to the unexpected attack.
Subsequent internal messages indicated NetEase as the victim, not the initiator of contract termination. Blizzard's revenue wasn't the majority for NetEase, making the loss acceptable. This perspective reflected in the stock market, where prices stabilized after initial panic, even beginning to rebound.
The notion of Blizzard's return persisted throughout the year, with most proving mere rumors. However, the real shock to the gaming sector came from the release of the "Online Game Management Measures (Draft for Soliciting Opinions)" last Friday, delivering a tangible blow to NetEase's foundation, causing a sharp stock decline.
Coincidentally, Blizzard, recently acquired by Microsoft in the largest game industry acquisition, made a significant move. Blizzard's founder, Bobby Kotick, announced his departure on December 29, 2023. Coupled with Microsoft's continuous emphasis on the Chinese market, the speculation of Blizzard's return became a hot topic. NetEase neither directly denied nor confirmed the rumors, allowing public sentiment to associate Blizzard and NetEase once again.
This connection injected confidence into the struggling stock market, as many believed in the possibility of renewed collaboration, easing the downward momentum.
Currently, neither Blizzard nor NetEase has provided a positive response to the potential reunion. The gaming sector's downturn persists, with various listed companies announcing buybacks and increases to restore market confidence, yet with minimal success.
Rational investors understand that all measures before specific regulatory actions take effect and demonstrate results are futile. Before that happens, investors must patiently await developments, avoiding impulsive decisions.
