Chinese online game operator The9 has lost the license to host Activision Blizzard's World of Warcraft
in the region, according to multiple reports in the Chinese media.
The news reports caused The9's shares to drop $2.45, or more than 18 percent, to $10.77 in morning trading on the Nasdaq.
China business publication JLM Pacific Epoch
cited Chinese language reports of an internal company letter from The9 president Xiaowei Chen, which indicated that fellow Chinese online game company NetEase had won the WoW
NetEase and Blizzard already have a close business relationship. The two companies announced a deal
in August 2008 that will have NetEase distributing the upcoming Blizzard RTS StarCraft II
in China. Chen's letter said WoW
would transfer to an unnamed company that entered a joint venture with Blizzard in August, leading to the implication that NetEase will soon be taking over WoW
duties in the region.
The letter also reportedly said the new WoW
operator offered to pay $22 million for servers and hardware that cost The9 $73 million. The new operator would pay $1 million to obtain The9's WoW
Chen reportedly stated The9 would not make any layoffs. The9's current contract expires on June 8.
Gamasutra has contacted Blizzard for confirmation and will update with any comment we receive.