The games industry’s China syndrome

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The games business is growing, going mainstream, and maturing. As a result its main protagonists have taken on a new role, whether they like it or not.

Last Sunday, during a post-match interview, a Hong Kong Hearthstone player Ng “blitzchung” Wai Chung expressed his support for the current protests there. Blizzard immediately cut the feed and punished the player and the two streamers who were interviewing him. (Here’s the write-ups from the WSJ and NPR.)

Blizzard explained itself by referring to it clause Section 6.1 (o), which states:

“Engaging in any act that, in Blizzard’s sole discretion, brings you into public disrepute, offends a portion or group of the public, or otherwise damages Blizzard image will result in removal from Grandmasters and reduction of the player’s prize total to $0 USD, in addition to other remedies which may be provided for under the Handbook and Blizzard’s Website Terms.”

This raises a few questions. Certainly this is a very broadly defined clause and it is understandable that Blizzard wants to retain control over the content that is associated with its brands. It is entirely within its right to protect its asset and, having signed the agreement, blitzchung doesn’t have a leg to stand on, legally.

But being right from a legal standpoint is subject to time. You’ll remember, of course, that it was illegal for women to vote not too long ago. Here, it looks a lot like one of the largest game publishers in the world is preemptively banning players for having an opinion on their current political climate. There haven’t even been repercussions from any of its Chinese partners. Perhaps Blizzard decided it didn’t need to wait, considering that Tencent dropped broadcasts for NBA team the Houston Rockets after its general manager recently tweeted support for the protests.

Sports have historically played an integral role in breaking down barriers between people. In fact, athletes are key political agents in a myriad of ways. Just last week, Megan Rapinoe won FIFA’s Player of the Year. Ms. Rapinoe has been consistently outspoken and an inspiration for female players everywhere. And what to make of the Emmy that Nike just won for its Colin Kaepernick protest commercial?

So, is Blizzard just going to brush past that? Despite the high expectations that Activision Blizzard has for competitive gaming, does this mean that we should not expect it to break any taboos or introduce any new idols and icons? How is this supposed to inspire an entire generation of consumers? Wouldn’t that be any advertisers dream?

One of Blizzard’s company values.

Meanwhile, China has been investing in foreign entities all over. Two of the five largest global game companies are Chinese, and their insatiable appetite to grow has resulted in making a string of investments around the world in the hopes of catching the next big hit. As the political climate has started to turn, these giants are forced to stay loyal to the same protectionist market economy that put them there in the first place.

As far as Blizzard is concerned, it all feels a lot like corporate insecurity. I get it. I live there now, too. Despite the glossy veneer of being honest and telling it how it is, you think that it be that way, but it don’t. (Yup.) Is ATVI going to play the role as a champion for freedom of speech as it ascends to a global stage of multinational media and entertainment firms that cater to advertisers and investors? Or is it going to pledge fealty to a governmental philosophy that stands in opposition of the values that allowed it to prosper to not miss out on whatever it can earn there after taxes and mandatory fees have been extracted? Seems so.

This was also news to some of its workforce. In the hours that followed, there was apparent dissent among Blizzard employees. And one US senator stated that “no American company should censor calls for freedom to make a quick buck.”

You can see how fans may take issue with some of this. What should light up Blizzard’s PR switchboard is the fact that roughly half of its World of Warcraft player base comes from China. If that audience turns against Blizzard, it could really feel the sting. Already creatives and former Blizzard employees are starting to speak out. I don’t think it’s a stretch to expect Hong Kong protests to start breaking out in World ofWarcraft and other Blizzard properties.

It leaves me with the question what other publishers plan to do when they come for them. And they will because every major firm has been desperate to penetrate the Chinese market in search of greater revenue. Games are for playing, yes. But they also communicate ideas and values.

The short term repercussions on this PR disaster will likely be limited. Anecdotally, Chinese gamers seem indifferent, and despite the global upheaval from the last 24 hours, it will likely die down.

Blizzard would do well to avoid a repeat, however.

In terms of market repercussions, the company will be fine. For one, given that China is a socialist economy, or at least claims it is, I have a hard time believing that any form of retribution would be swift or particularly well-organized. They’re still working on about a year’s worth backlog of game approvals, so I doubt that they have the administrative agility to act on this immediately, or at all.

Long-term, however, Blizzard should do some soul searching. Lots of creative firms have a strong opinion on the social, cultural, and political realities of our time. Game companies, especially the publicly traded kind, are not exempt from this. When Nike got called out for endorsing slave labor, it took responsibility and re-built its internal belief structure from the ground up. My recommendation is that Blizzard and its peers think deep and hard about the values they purport to uphold in relation to their respective company strategies.

Broadly speaking, the games industry and its key protagonists are struggling with the demands and affordances that come with being a global, mainstream form of entertainment. Hollywood has understood this for years. So, too, has the music industry. The games industry has to ask itself where it stands on geo-political issues, and where and with whom it does business. Games are relatively new to these types of conversations. Now’s a good time as any to start that dialogue.

P.S. Before I get emails: the expression China syndrome is “not intended to be taken literally — that describes a fictional result of a nuclear meltdown, where reactor components melt through their containment structures and into the underlying earth, “all the way to China.””