Alibaba unit ordered to pay NetEase $7.2 million over game copyright

By Josh Ye

HONG KONG (Reuters) -A Chinese court has ordered an Alibaba Group unit that developed the hit mobile game "Three Kingdoms Tactics" to pay NetEase Inc 50 million yuan ($7.2 million) in compensation over copyright infringement, according to a statement from NetEase.

Ejoy, the Alibaba subsidiary behind the hugely popular strategy game, said on microblogging site Weibo that it would appeal the decision of the Guangzhou court, and that the game will continue to operate.

"Three Kingdoms Tactics" is Alibaba's most profitable game, earning more than $1.97 billion from player spending since launching in 2019, according to data firm App Magic.

The fine, if upheld through the appeal, would be one of the heftiest issued by a court in China involving video games.

Ejoy was ordered to delete 79 items which were considered to have infringed on the copyrights of "Shuai Tu Zhi Bin", another popular strategy game developed by NetEase, according to the court's ruling.

The Alibaba unit said in its statement the court had rejected NetEase's demand to suspend the operation of "Three Kingdoms Tactics" while also acknowledging that the game had its own innovations.

"Shuai Tu Zhi Bin", also known as "Invincible", is one of NetEase's most profitable games, having made just under $1 billion since its launch in 2015.

A NetEase spokesperson said the ruling "emphasizes the importance of fair competition in the gaming community, and is also a victory for our development teams who work hard to develop original content such as Invincible".

($1 = 6.9121 yuan)

(Repoorting by Josh Ye in Hong Kong and Beijing Newsroom; Editing by Christian Schmollinger, Muralikumar Anantharaman and Jan Harvey)