SEPT. 20, 2009 • After many delays in taking control of operations of World of Warcraft in China, on June 7 NetEase was finally allowed to go back into full operation of the MMO by the Chinese government. NetEase can now sign up new customers to the MMO. Chinese officials had viewed the switch over in management from The9 to NetEase as an opportunity to treat the latter as a new company seeking to market a new game, forcing NetEase to submit the MMO for a new series of content evaluations. From late July on, NetEase was allowed to run World of Warcraft for free as a test, and allow existing subscribers to play. During the test period, it is estimated the cost to NetEase was 1 million yuan ($146,425) per day.

Impact: According to Lisa Cosmas Hanson, managing partner of Niko Partners, the commercial relaunch of World of Warcraft in China was significant not only to NetEase and Blizzard so that they could resume fee generating online game services for their customers, but even more significant from a regulatory standpoint. Very recently the Chinese government clarified that the Ministry of Culture and General Administration of Press and Publications would have distinct regulatory roles for the video game industry. There has been much confusion about the true clarification, but most people concur that the Ministry of Culture holds higher authority than the GAPP. NetEase asserts that the Ministry of Culture approved the commercial relaunch of WoW, but the GAPP reportedly did not grant its own approval. The move by NetEase was bold in that it was a gamble based on the interpretation of the newly stated regulatory authority. Certainly game publishers will be confused about which regulatory body to approach for the approval and updates of online games in China until even further clarification is made public by the Chinese government.