Earlier this week, NetEase made the surprising decision to cut jobs at its Marvel Rivals development studio located in Seattle. Given the massive success of Marvel Rivals, which attracted over 40 million players since its launch in December, many were puzzled by this move. The game’s success contributed significantly to NetEase’s impressive $2.9 billion revenue in gaming and services during the quarter it premiered.
Interestingly, reports indicate that before Marvel Rivals even hit the shelves, NetEase’s CEO, Ding, contemplated scrapping the game altogether. The sticking point appeared to be the licensing fee to Disney for using Marvel’s iconic superheroes and villains. Instead, there was consideration of using entirely new hero designs developed by NetEase’s own artists. However, NetEase has denied these claims, according to a Bloomberg report.
In the past year, we’ve seen NetEase scale back its investments in several studios outside of China. This includes leaving behind Worlds Untold in Vancouver, led by former BioWare creative head Mac Walters; Jar of Sparks in Seattle, started by Xbox veteran Jerry Hook; and the Tokyo-based Ouka Studio, known for working on Square Enix’s Visions of Mana. The cutbacks have also hit closer to home, with reports suggesting that NetEase’s Chinese studios could face reductions so severe that no major titles might be released from them in 2026.
On the heels of these developments, Bloomberg’s report was soon followed by Game File’s revelation that NetEase is planning to divest from a majority of its overseas teams. This could affect more than a dozen studios supported by the company, potentially including recent establishments like T-Minus Zero Entertainment and Fantastic Pixel Castle, which boasts connections with industry veterans from World of Warcraft and League of Legends. Additionally, NetEase made notable acquisitions of Grasshopper Manufacture and Quantic Dream in 2021 and 2022, respectively.
For fans of the Yakuza/Like A Dragon series, hoping for new works from its original creators, the news might be disappointing. It appears NetEase has halted further investments and marketing efforts for upcoming projects from Japanese studios. On a brighter note, enthusiasts can still look forward to fresh releases from Ryu Ga Gotoku Studio, with new additions like a Virtua Fighter game and Project Century in the pipeline.
The layoffs at NetEase’s international studios are part of a broader pattern of instability that’s plagued the gaming industry in recent years, with many companies facing substantial cutbacks.
Updated Note: Following the latest insights from Game File, the outlook on NetEase’s retreat from overseas studios seems even more concerning.
