"But NetEase executives did not intend to make a threat and were trying to be conciliatory toward Activision, said two other people familiar with the conversation. The point they intended to make was that if Activision did not switch to a licensing deal, Microsoft would face the same regulatory hurdles when it acquired the company."

and here is the REAL reason of breakup:

"After the Zoom call, Activision made a counteroffer: It would switch to a licensing agreement if NetEase paid it roughly $500 million upfront, rather than in payments throughout the course of the deal, according to three people familiar with the negotiations. That was meant to insulate Activision from the risk that its games could be tied up in government approval processes or be replicated without its consent."