NetEase will operate World of Warcraft in mainland China for the next three years under the terms of a newly signed licensing deal with Blizzard.

The company, which signed similar deals with Blizzard for Warcraft III, Starcraft II and Battle.net last year, takes over operations of the online title from The9.

"We appreciate the enthusiasm that Chinese gamers have shown us over the years, and we've always worked hard, in collaboration with our partners, to ensure that these players receive the same high-quality service and gameplay experiences that we deliver in other regions," said Blizzard CEO Mike Morhaime.

Commenting on the deal, Wedbush Morgan analyst Michael Pachter said that, under the terms of Activision Blizzard’s contract with The9, the publisher received a royalty of 22 percent on revenues generated in China, a figure likely to swell under the terms of the new deal with NetEase.

“We estimate that the current arrangement generated revenues of around $50–55 million annually (using most recent subscriber figures), at close to 100% margin," he said.

“Although the terms of the new arrangement were not disclosed, we estimate that the royalty rate will increase to at least 55%, and that the new arrangement will generate revenues of over $140 million annually."