What Does Blizzard's Press Release Mean for The9 & World of Warcraft? (NCTY)

| About: The9 Limited (NCTY)

This past Friday, Blizzard Entertainment released the following media altert:

IRVINE, Calif.--(BUSINESS WIRE)--April 14, 2006--Blizzard Entertainment Inc. today reiterated its commitment to its future business in mainland China by announcing that it is currently actively exploring and discussing cooperation opportunities and further expansion of its business with local potential partners for mainland China.

The company also announced that it has invited China The9 Interactive (NASDAQ:NCTY), Blizzard's local current partner for World of Warcraft in mainland China, to negotiate the upcoming World of Warcraft expansion set, World of Warcraft: The Burning Crusade, and to discuss its release in mainland China currently planned for next year.

Further details regarding the launch of World of Warcraft: The Burning Crusade in mainland China, as well as partnerships in connection with future Blizzard Entertainment titles in mainland China, will be revealed at a later date.

From Gamasutra:

Since it seems as if it would not be possible for different companies to manage the original WoW and its expansion, a switch of distributor for both may possibly be on the cards, though Blizzard's formal statement simply commented that further details on distribution will be "revealed at a later date".

From Bill Bishop:

I have been hearing for over a month that The9 (NCTY) and Blizzard are in a dispute about the "The Burning Crusade" expansion pack to World of Warcraft. Blizzard apparently wants a new license fee and other additional terms to provide the update to The9, but The9 thinks it should be included in the original WOW license deal......

Most likely it (Blizzard's announcement) is a negotiating tactic on Blizzard's part to try to squeeze The9.

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