Layoffs at Marvel Rivals Reflect Broader Reductions at NetEase Games

Earlier this week, when NetEase decided to reduce its workforce at the Seattle studio behind Marvel Rivals, many found it puzzling, especially given the game’s remarkable success. Since its release in December, Marvel Rivals has garnered over 40 million players, contributing significantly to NetEase’s impressive $2.9 billion earnings in gaming and services during that quarter.

Rumors have circulated that Ding, NetEase’s CEO, even contemplated scrapping Marvel Rivals before its launch. The thought of paying Disney for licensing Marvel’s iconic characters reportedly didn’t sit well with him, prompting the idea of replacing them with original designs by NetEase artists. However, NetEase has denied this claim, according to Bloomberg.

In the past year, NetEase has been stepping back from several international studios. This includes divesting from Worlds Untold in Vancouver, led by former BioWare talent Mac Walters; Jar of Sparks in Seattle, launched by Xbox’s Jerry Hook in 2022; and Ouka Studio in Tokyo, the team behind Visions of Mana for Square Enix. The company has also been scaling down its local studios, which may mean that new major titles from NetEase’s Chinese branches might not emerge until at least 2026.

Following Bloomberg’s report, Game File added on Friday that NetEase intends to pull back from “the majority of its overseas teams.” This withdrawal could potentially affect over a dozen studios that the Chinese publisher has sponsored, including T-Minus Zero Entertainment, founded by ex-BioWare Austin VP Rich Vogel, and Fantastic Pixel Castle, crafting a “modernized fantasy MMORPG” with veteran designer Greg Street. NetEase has also acquired studios like Grasshopper Manufacture and Quantic Dream in recent years.

For fans of the Yakuza/Like A Dragon series eager for projects from their original creators, the news isn’t promising. Reports suggest that NetEase has halted further funding and time allocation for new Japanese studio titles, with no plans in place for their promotion. Nonetheless, fans can anticipate upcoming releases from Ryu Ga Gotoku Studio, including a new Virtua Fighter and Project Century.

The layoffs at NetEase’s international studios are emblematic of a broader trend of instability within the video game sector, which has seen significant job cuts in recent times.

Update: We’ve incorporated recent insights from Game File that depict an even starker outlook on NetEase’s strategy to retreat from its overseas operations.