(Yicai Global) Jan. 17 -- Negotiations between Blizzard Entertainment and NetEase to extend the China licenses of Blizzard’s games held by the Chinese internet giant have broken down, a source close to the US game publisher told Yicai Global.

Blizzard President Mike Ybarra approached NetEase to discuss the possibility of extending their previous deal, due to end on Jan. 24, by six months, the source said. Senior management from NetEase participated in the negotiations last week, but refused to accept Blizzard’s proposal.

Blizzard pulled out of its partnership with NetEase in November last year, rendering most of its highly popular games, such as World of Warcraft, StarCraft, Hearthstone and Overwatch, no longer available on the mainland from next week and causing an outcry among the gaming community.

Blizzard was hoping to buy some time to find another partner, or to renegotiate a deal with NetEase, the source said.

It is not clear why the 14-year collaboration broke down, as both sides gave different reasons.

NetEase wanted to completely change the framework of the partnership, which would cause Blizzard to lose control of the games’ intellectual property and this was not acceptable to the Santa Monica-based company, the source said.

Blizzard did not reach a contract renewal which meets its operational ideals and commitments to players and employees, the firm said in November.

NetEase has been trying hard to find a way forward with Blizzard, but they were unable to agree on some key terms, it said at the time.

The negotiations with Blizzard were much more difficult than expected and it was not possible to meet its demands on some central issues concerning sustainable operations, the China market and the core interests of players, Chief Executive Officer Ding Lei said in late November.

Blizzard wanted to raise its commission and the prices of its games in China, the Guancha website reported previously, but the report was not corroborated by the source.

Blizzard objected to the dissolving of NetEase’s subsidiary Shanghai EaseNet Network Technology, the operator of Blizzard’s games, as the work handover would affect operations, said the source.

Most of EaseNet’s employees have left the firm, South China Morning Post reported last week. The team had no more than 100 staff before it was disbanded, and most were operational personnel. Around 10 team members are staying behind to tidy matters up.

NetEase has yet to respond to Yicai Global’s queries.

Editor: Kim Taylor