The encyclopedia · Software & IT · Strategic decision · 2005–2009
The9 earned 75% of its revenue from World of Warcraft — then Blizzard gave it to NetEase
Shanghai's The9 built a Nasdaq-listed business on one game. When the licence expired in June 2009, Blizzard handed it to a rival. Revenue collapsed.
The9 · Blizzard Entertainment · NetEase · 2009-04-16
What happened
The9 (第九城市), founded in Shanghai in 1999, became one of China's largest online-game operators by securing the exclusive Chinese licence for World of Warcraft in 2005. The game became the country's largest online game, and The9 derived at least 75% of its revenue from it. The company listed on Nasdaq under the ticker NCTY.
On 16 April 2009, Blizzard announced it would not renew The9's licence and had awarded a three-year deal to NetEase, which already hosted nearly every other Blizzard title in China. The9's licence expired on 8 June 2009. The company had no comparable title to replace the lost revenue.
By 2014, The9 reported revenue of US$10.16 million and a net loss of US$17.03 million — a fraction of its former scale. The company that had once operated China's most popular online game was reduced to a marginal player with fewer than 500 employees.
Why it happened
- With 75% of revenue from one licensed title, The9 was a distribution arm with no product of its own — when the licensor walked, the business walked with it
- Blizzard's other Chinese titles were already hosted by NetEase, so consolidating WoW there was operationally simpler; The9's dependence on a single partner made it replaceable
- The9 never built a second revenue pillar — its other licences (Guild Wars, Hellgate: London, FIFA Online 2) were either niche or short-lived, and none approached WoW's scale
- The four-year licence window was treated as a permanent franchise rather than a contract with an expiry date; no public evidence suggests The9 developed a contingency for non-renewal
The lesson
A distribution business built on one licensed product is a contract, not a company — the licensor can always find a cheaper distributor.
Aftermath
NetEase operated World of Warcraft in China from 2009 until January 2023, when Blizzard and NetEase also parted ways. The9 pivoted to smaller game licences and briefly to cryptocurrency mining, but never recovered its former scale.
Sources
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