Earlier this week, NetEase made headlines by cutting jobs at its Marvel Rivals studio in Seattle, leaving many puzzled. The move was unexpected, especially since Marvel Rivals has been a massive hit, amassing over 40 million players since its debut in December. The game’s success also contributed significantly to NetEase’s impressive $2.9 billion revenue in gaming and services for that quarter.
There were rumors that Ding, the CEO of NetEase, contemplated axing Marvel Rivals before it even saw the light of day. His hesitation apparently stemmed from the cost of Disney’s licensing fees for Marvel’s iconic characters, and he even briefly considered replacing them with original heroes from NetEase’s artists. However, NetEase has denied this narrative, according to Bloomberg.
Over the past year, NetEase has been pulling back from several studios outside China. This includes distancing from the Vancouver-based Worlds Untold, helmed by former BioWare creative Mac Walters; Seattle’s Jar of Sparks, established by Xbox veteran Jerry Hook in 2022; and Tokyo’s Ouka Studio, known for crafting Visions of Mana for Square Enix. Reports suggest that Ding is also trimming down local studios. These reductions might be profound enough to halt major title releases from NetEase’s Chinese studios by 2026.
Soon after Bloomberg’s report, Game File broke the news on Friday that NetEase intends to offload most of its overseas teams. This move could impact over a dozen studios with NetEase backing, including recent ventures like T-Minus Zero Entertainment, created by former BioWare Austin VP Rich Vogel, and Fantastic Pixel Castle, which is working on a “modernized fantasy MMORPG” with guidance from Greg Street, a former World of Warcraft and League of Legends designer. In the past few years, NetEase also acquired studios like Grasshopper Manufacture and Quantic Dream.
Fans of Yakuza/Like A Dragon hoping for new projects from its creators might be disappointed. NetEase seems to have pulled the plug on further funding and development time for new games from Japanese studios, with no plans to market or promote them. Despite this, there’s still exciting content on the horizon from Ryu Ga Gotoku Studio, including a new Virtua Fighter and Project Century.
The layoffs at NetEase’s international studios are indicative of a broader pattern of instability in the video game industry, which has faced significant downsizing in recent times.
Update: This article includes fresh insights from Game File, escalating concerns about NetEase’s ongoing retreat from their international studios.
