Blizzard has proudly reported a larger number of subscribers every year since World of Warcraft's release, except last year. Is the mess with Chinese regulatory agencies to blame?

However, MMOs aren't exempt from the government's strict stance regarding censorship. It's common knowledge that the Chinese version of WoW is substantially different from the North American client; to publish in China, Blizzard had to revise many visual elements of the game, especially imagery depicting "undead" creatures, skeletons and corpses. (The Chinese version of WoW isn't the only censored version; other countries required specific changes to graphics like blood, depending on the region.)

The Wrath of the Lich King expansion is all about the undead and rife with necromantic themes, so it's not exactly a mystery why the PRC is having such a tough time approving it for publication. The issue of MMO addiction is also a prevailing factor; last month, we learned about a new "anti-addiction" MMO registration system that will begin in China soon. All MMO players will be required to register their names and government-issued ID card numbers to the system, which will monitor how much time they spend playing online.

It might seem the Chinese government would just as soon do away with all online gaming, considering all the recent drama and turmoil that companies like Blizzard have faced. But, on the contrary, online gaming is flourishing in China as a multi-billion dollar industry. In fact, China is expected to claim 50 percent of the world's online gaming market by 2012, as we reported last November. "Two-thirds of China’s 338 million Web users are now online gamers," according to the attributed WSJ article. "The online-game industry, which currently accounts for more than half of the total Internet economy, will see strong annual growth at a rate of 20% in future years, the report says."

Without a doubt, Web-based online gaming and MMOs are a big business in China; despite the ongoing regulatory and political snafus, China's gaming industry isn't going anywhere—it's just a matter of who controls it and thus, who profits from it the most.

Meanwhile, millions of Chinese WoW players have waited for more than a year to enter Northrend in Wrath of the Lich King, or haven't been able to play at all. Considering Morhaime's comment that half of all WoW players are Chinese citizens, it doesn’t take a rocket scientist to deduce that last year's events had a substantial impact on Blizzard's bottom line. In fact, it's anyone's guess how the company's subscriber count remained at 11.5 million by 2010, instead of dropping (not to mention Morhaime's disclosure that Blizzard retains only 30 percent of all trial subscribers).

And what about WoW's current fate in China? NetEase is trying to wipe the slate clean and "start over". Last week the company announced [via Yahoo News] it will suspend new player registrations as ordered, while remaining online to provide "free" play time for existing subscribers. NetEase will then seek approval from regulators to publish The Burning Crusade expansion (despite the fact that it's already been available to Chinese players for some time).

If TBC is approved, NetEase will presumably re-submit the Wrath of the Lich King expansion. Perhaps by then—whenever "then" may be—Chinese WoW players will finally have the chance to set foot on Northrend for the first time. Meanwhile, the rest of the world will probably be leveling up Goblins and Worgen in Cataclysm.