Market Insight

Blizzard will co-develop Diablo Immortal with NetEase

November 06, 2018

Chenyu Cui Chenyu Cui Senior Research Analyst, Games

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Blizzard announced at last week's Blizzon event that it will partner NetEase to develop Diablo Immortal, a mobile massively-multiplayer RPG based on the Diablo IP for Android and iOS devices. Despite the availability of Hearthstone across PC and mobile platforms, this is Blizzard’s first game designed exclusively for mobile devices. The company confirmed that Diablo Immortal features new storylines that connect the end of Diablo 2 and the beginning of Diablo 3, and will include iconic Diablo character classes. NetEase will be responsible for publishing the game in China while Blizzard will take care of other regions. The monetization and launch date have not been specified, but registration for beta testing is already open.

It’s not surprising to see Blizzard choose NetEase to co-develop this mobile game, given their long-time partnership. Blizzard lacks mobile games experience a s well as distribution capacity, and NetEase has delivered strong R&D and marketing performances via its games available in both China and other regions. Also, with Blizzard's PC portfolio having delivered flat performance in recent years, it makes sense for it to further explore the opportunities presented by mobile.

Adapting Diablo IP for mobile platforms also benefits NetEase. Besides its long-serving Fantasy Westward Journey, other MMO mobile titles quickly fell out of the charts and failed to boost NetEase’s mobile games revenue. Although Knives Out and Onmyoji remain leading titles, their revenue struggles to significantly boost its whole games business. Diablo is a well-known IP with a large fanbase, meaning it could become a major contributor to NetEase’s mobile-MMO games segment. Moreover, since Knives Out found success in Japan, NetEase has been eager to seek further overseas opportunities, and Diablo Immortal is one with obvious appeal beyond Asia.

One of the major challenge for the game is that its launch in China might face obstacle as the publication number is still suspended, and stricter policies covering the Chinese online gaming industry are on the way. While perhaps not suitable for those players expecting Diablo 4, this opportunity to broaden the franchise's reach is one that Blizzard has to explore, especially in Asia where a number of major MMO, action, and/or RPG titles have made convincing leaps from PC to mobile.

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