Here's the thing... ...these platforms exist for gaming, not political opinions. Some viewers may be turned off by that, just as sports audiences often get turned off by displays of political demonstrations in sporting events. This is therefore a legitimate matter of commercial consideration and intended use of a privately owned and operated platform. Free speech is not immunity to the social consequences of that speech - both to the speaker and the owner of the platform of that speech. Blizzard are right to have rules and enforce them firmly, otherwise it just becomes a free-for-all for anyone to use the platform to spread any kind of political opinion.
A separate issue is the proportionality of enforcement. Personally, banning Blitzchung for an entire year and stripping him of his prize money does seem heavy-handed. Unfortunately, there is no industry-wide standard for enforcement and consequence for such actions, and therefore it is impossible to say for certain. It is therefore ultimately down to Blizzard's own discretion, as even they openly admitted, and I think they erred too much on the side of harshness here. It should be noted that the incident happened in Taiwan, which have their own free speech laws but is a disputed territory claimed by China, so that may have played into the harshness of the punishment.
Is there commercial consideration regarding access to the Chinese market at play here? Most definitely. The reality is that China is a gigantic gaming market, Activision Blizzard is a publicly traded company, and in the Friedmanian capitalist system that currently dominate the global economy, the interest of the shareholders is paramount - often to the expense of all other considerations. This is why it's much easier for, for example, Epic Games to take the supposed "high road," since they are privately owned despite being 40% owned by Tencent - though this has yet to be put to the test.
More troubling is the knee-jerk censorship that occurred in the subsequent American Collegiate tournament, which is clearly a sign of Chinese influence on issue of speech on private platform seeping across the Pacific. Blizzard have handled themselves poorly here, as they also have when they (or their Chinese local office) promised to "always respect and defend the pride of (China)," as if they assumed that nobody outside China would notice and/or be able to translate. They just made the situation worse.
As for the new information highlighted by the OP, I don't think that makes sense to be a deliberate action on Blizzard's part. These internet boycotts tend to fizzle with time, which would be Blizzard's first assumption, so it makes little sense to stand in their way, especially as any loss can be made up in gains in the Chinese market. The authentication server is probably stressed from elevated number of requests. Still, not great optics.
In summation: neither Blitzchung nor Blizzard are fundamentally in the wrong. Blitzchung exercised his right as a citizen of Hong Kong in accordance with Taiwanese law. Blizzard are also right to enforce some ground rules on their platform to stop it turning into a free-for-all. Unfortunately, Blizzard have been heavy-handed and indiscreet in their enforcement, and subsequent missteps have fanned the flames. No doubt, China's clout and willingness to use them aggressively has played into this mess, and it stems from the simple reality that China's gaming market is ginormous, and Activision Blizzard's first responsibility is to their shareholders, who just want more money and don't care about any of this stuff.
All in all, a fine mess of Blizzard's own making all round. As for me, I haven't bought a Blizzard game since the last StarCraft II expansion, so this doesn't affect me much. Won't be deleting my account, though - I'm staying neutral.
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