NetEase Games Implements Broader Workforce Reductions, Impacting Marvel Rivals Team

Earlier this week, a surprising decision came from NetEase as they cut jobs at their Marvel Rivals development studio in Seattle. This move left many scratching their heads, given the game’s immense success. Since its launch in December, Marvel Rivals has captivated over 40 million players and significantly boosted NetEase’s earnings to a staggering $2.9 billion in gaming and services revenue for that quarter.

Interestingly, reports have emerged that Ding, NetEase’s billionaire CEO, nearly halted the development of Marvel Rivals before its release. It seems he was hesitant about forking out a hefty licensing fee to Disney for the rights to Marvel’s beloved superheroes and villains. There was even talk about replacing these iconic characters with original creations from NetEase’s own artists. However, NetEase has publicly denied these claims, according to Bloomberg.

Over the past year, we’ve seen NetEase pull back its investments from several studios outside of China. Notably, they’ve parted ways with Vancouver’s Worlds Untold led by former BioWare creative Mac Walters; Seattle’s Jar of Sparks, established by Xbox alum Jerry Hook in 2022; and Tokyo-based Ouka Studio, known for its work on Visions of Mana for Square Enix. Even within China, there are whispers of substantial cutbacks, potentially affecting the release of major titles by 2026.

Hot on the heels of a Bloomberg report, Game File released details on Friday suggesting that NetEase is planning to step back from “most of its overseas teams.” This could cast uncertainty over more than a dozen studios supported by the Chinese giant. Studios like T-Minus Zero Entertainment, led by former BioWare Austin VP Rich Vogel, and Fantastic Pixel Castle, which is developing a revamped fantasy MMORPG with insights from a designer with roots in World of Warcraft and League of Legends, might feel the impact. Not to forget, NetEase acquired Grasshopper Manufacture and Quantic Dream in 2021 and 2022, respectively.

For those who are fans of Yakuza/Like A Dragon eagerly waiting for new projects from their original creators, the news might be a little disheartening. NetEase has reportedly cut funding and time for new titles from Japanese studios and appears to have no intention of promoting these works. Yet, there’s a silver lining as Ryu Ga Gotoku Studio has more projects in the pipeline like a fresh Virtua Fighter and Project Century.

These international layoffs at NetEase are reflective of a wider trend of insecurity plaguing the video game industry, which has seen significant reductions in recent times.

Update: This article includes new insights from Game File, offering an even more somber look at NetEase’s strategic withdrawal from international studio investments.