World of Warcraft shut down in China

Citing "gross violations," regulator revokes NetEase's permit to operate game in authoritarian nation

Posted on Nov 2, 2009 - 8:53pm EST

A Chinese regulator has suspended approval for NetEase.com Inc to operate Activision Blizzard's World of Warcraft online game, putting the future of the recently-launched and high-profile title in question in China.

Citing "gross violations" of regulations, the General Administration of Press and Publication said it had halted and returned NetEase's application to operate "Burning Crusade" - the latest version of the game licensed from Activision.

The regulatory body posted a statement on its Web site that demanded the NetEase affiliate company that operates World of Warcraft to suspend charging users to play the game, and disallow new account registrations.

The news comes as Beijing tries to tighten its control over online gaming, worried about undesirable content. In October, the regulator banned many forms of foreign investment into the country's online games industry - expected to grow 30-50 percent this year to up to $4 billion.

But analysts said the impact on other Chinese online gaming operators such as Shanda would be marginal, because most were in compliance with regulations set by both the administration as well as the Ministry of Culture, also viewed as a regulatory body for the industry.

NetEase launched the World of Warcraft game commercially in China on Sept. 19. Roth Capital Partners analyst Adam Krejcik said the move by the GAPP was not surprising, given previous reports that the agency was displeased that the popular multiplayer online game was launched without its approval.