Summary
Even moreNetEase Gamesstudios are at risk of closure following the company’s decision to cut costs across some of its non-Chinese subsidiaries, according to a newly emerged report. However, theMarvel Rivalsdeveloper is currently said to be exploring other options.
On February 20, NetEase shared its consolidated financial report for the fourth quarter of 2024, reporting a 1.5% year-on-year revenue growth, but a 2.6% decline in gross profit. The results missed analyst expectations, and were followed by a Bloomberg report claimingNetEase nearly canceledMarvel Rivalsand recently started aggressive cost-cutting efforts across its overseas game development divisions. The curtailing of the Chinese company’s foreign game business is said to have been initiated by founder and CEO William Ding, who is supposedly wanting to refocus the group’s resources on a smaller catalog of titles.
While the downsizing has so far only affected several studios, many more could follow in the near future.Game File’s Stephen Totilo reports that NetEase is presently “actively shopping around” multiple overseas studios, citing sources familiar with the company’s plans. The list of subsidiaries that the group is looking to offload supposedly comprises multiple studios that NetEase only announced since 2022. Aside from brand-new game workshops, this group also includes some established studios, like theHeavy Raindeveloper Quantic Dream.
Over a Dozen NetEase Studios Are Reportedly Facing Closure
Over a dozen companies could end up being closed if NetEase fails to find a buyer for them, as per the same report. A lot of them could consequently cease to exist before shipping a single game. Since 2022, NetEase has followed a pattern of announcing a new studio and delegating its leadership to a developer known for at least one popular game or series. FormerResident Evilproducer Hiroyuki Kobayashi was given control of GPTRACK50 Studios, long-timeMass Effectwriter Mac Walters was assigned to lead Worlds Untold, and ex-Watch Dogsproducer Sean Crooks was given the reins of Bad Brain Game Studios. None of these companies have shipped anything yet—and might never do so if NetEase fails to find a buyer for them.
NetEase also owns minority stakes in multiple overseas developers, includingThe Blood of Dawnwalkermaker Rebel Wolves, founded by some former CD Projekt Red developers. There are currently no indications that these partially owned ventures will be affected by the ongoing downsizing.
It’s equally unclear how long NetEase intends to keep shopping around its studios before it decides to close them. The Chinese gaming giant has already paused operations at Worlds Untold and Jar of Sparks in November 2024 and January 2025, respectively.
