Activision Blizzard saw its stock price drop nearly 4% this week after the U.S.for publicly expressing support for Hong Kong protesters prompted outrage and calls for boycotts from the online gaming community.
Video game players and developers have taken to social media platforms like Reddit and Twitter to express their displeasure with Activision Blizzard, whose popular titles include "Call of Duty" and "World of Warcraft." Hashtags for #BoycottBlizzard have been trending on Twitter.
"It's really unlike anything I've seen in games, which I've been competing or designing or commenting on for 20 years now, and this is by far the biggest incident I've seen," said Brian Kibler, a broadcaster for online video games.
Kibler was slated to host an online broadcast of the tournament finals for Hearthstone, the same game that Hong Kong player Ng Wai Chung was competing in, at Blizzard's biggest annual video game convention next month. But he said he pulled out in protest of Blizzard's decision to ban Chung, known in gaming circles as "Blitzchung," from the Hearthstone Grandmaster card game for a year after Chung shouted "Liberate Hong Kong, revolution of our times" last weekend during a post-game interview with two Taiwanese online video game show hosts.
Blizzard also seized Chung's earnings from the tournament, which amounted to $10,000. As of November 2016, Chinese technology giant Tencent had a 4.9% stake in Activision Blizzard.
Some players now appear to be withdrawing from Blizzard's platforms — or at least considering it. Some reported having trouble deleting their Blizzard accounts. Blizzard's customer support feed on Twitter said Wednesday that its engineers are addressing a bug that's causing users trying to cancel their accounts to get a message that says "too many attempts."
Blizzard did not respond to multiple requests for comment. Shares of the company have gained ground since slumping earlier this week.
Activision counting on China growth
The controversy comes as Activision is struggling to boost results at Blizzard, which primarily makes games for PCs. The stock has been largely flat this year, but fell 26% in 2018.
Activision merged with Blizzard as part of a deal with Vivendi in 2008. Blizzard's titles last year made up just over 30% of Activision's overall $7.2 billion in sales. But sales, led by its aging World of Warcraft game, have been falling. Even before the Hearthstone brouhaha, analysts had expected Blizzard's revenue to slump 28% this year to $1.7 billion.
Hearthstone alone generated $385 million in sales in 2018, a figure forecast to drop to just over $300 million this year. Blizzard is supposed to announce new titles at its upcoming gaming confab early next month.
Activision's biggest game is Call of Duty. The company launched its latest mobile version of the game last week, and it has already garnered 100 million downloads. But Activision is still waiting for approval from the Chinese government to launch the latest version of Call of Duty there, a factor that could explain why Activision was quick to ban a gamer for comments supporting Hong Kong.
Analysts expect Call of Duty to generate $1.1 billion in revenue for Activision in the final three months of 2019, or more than 40% of its revenue in the key Christmas quarter. Activision's other big money maker is the mobile phenomenon Candy Crush, which it got in 2016 when it acquired King Digital Entertainment in 2016. The Candy Crush franchise is expected to generate nearly $1.6 billion in sales in 2019, or about a third of Activision's annual overall sales.
With a burgeoning middle class, the Chinese market has become vital to many U.S. companies looking to expand. But the swirl of censorship and outrage around the Hong Kong protests also highlights the fine line American businesses must walk when dealing with China, especially companies like Blizzard or the NBA that have enjoyed reputations as socially progressive. Blizzard has won praise for the diverse set of characters populating its multiplayer game "Overwatch."
Some users are taking Overwatch hero Mei as a symbol for the Hong Kong pro-democracy resistance, hoping to turn the only explicitly Chinese character in the game into a meme that will get Blizzard censored by China. The Chinese government has already banned "Winnie the Pooh" after internet users likened the cartoon bear's appearance to Chinese president Xi Jinping.
On Tuesday, at Blizzard's offices in Irvine, California, a small group of Blizzard employees reportedly staged a walkout to protest the Hong Kong controversy. According to The Daily Beast, the employees gathered around a statue of an orc at the entrance, where plaques etched with slogans from Overwatch, such as "Every Voice Matters" and "Think Globally," were papered over by workers who felt the sentiments conflicted with Blizzard's decision to ban Chung.
— CBS News' Stephen Gandel contributed reporting.