Marvel Rivals layoffs may not be the end of recent NetEase cuts
Despite signs of it retreating from overseas investments, publisher NetEase says it remains committed to its plans for global expansion.
Despite signs of it retreating from overseas investments, publisher NetEase says it remains committed to its plans for global expansion.
The recent layoffs at the US development team for Marvel Rivals were a shock to everyone, considering how successful the online shooter has been.
Although it did come after Chinese publisher NetEase made numerous cuts at other Western studios it owns, as well as shutting down the developer behind Visions Of Mana the very day the game launched.
Following the Marvel Rivals news, reports emerged that NetEase is looking to abandon some, if not all, of its international investments; something NetEase has so far denied.
According to a report by GamesBeat, industry insiders believe NetEase has decided it wants to stop relying on overseas staff to make its games, which could result in further layoffs and studio closures.
The supposed reasons for this are twofold. The first is, unsurprisingly, due to rising development costs, particularly those for US developers.
The second is because China’s own games industry has matured much more quickly than expected, to the point where it’s started to enjoy genuine international success.
Aside from free-to-play fare like Genshin Impact, the recent success of Black Myth: Wukong (which sold 10 million copies in just three days) has demonstrated the country can also pump out popular AAA console games.
What game studios does NetEase own?Aside from its own internal development studio, NetEase Games, NetEase owns an additional 20 studios across the US, Europe, and Asia. Those studios are:
Grasshopper Manufacture – Suda51’s No More Heroes studio PinCool Nagoshi Studio – founded and run by Yakuza series creator Toshihiro Nagoshi NetEase Games Tokyo GPTRACK50 Studio Studio Flare Quantic Dream – the studio behind Detroit: Become Human and the upcoming Star Wars Eclipse Jackalyptic Games T-Minus Zero Entertainment Anchor Point Studios NetEase Games North America BulletFarm NetEase Games Montreal SkyBox Labs – co-developer on Halo Infinite and multiple Age Of Empire games Bad Brain Game Studios Spliced Rebel Wolves – founded by former CD Projekt staff NetEase Games Korea Liquid Swords Fantastic Pixel CastleSony’s also started bringing large scale Chinese games to the PlayStation 5, including this year’s action role-player Lost Soul Aside and the recently revealed Tides Of Annihilation. So, why rely on overseas developers when Chinese studios can make them instead – and more cheaply.
It’s possible the tariffs imposed against China by US president Donald Trump have something to do with it too. Industry experts had warned months ago these tariffs could lead to increased prices for consoles and games, and they will also impact Chinese game studios and thus the wider industry – which makes considerable use of Chinese developers for support work.
As such, the Entertainment Software Association (ESA), which represents all the big name game publishers, has publicly asked to be consulted on such tariffs to ‘avoid causing significant harm to everyday Americans and to one of the fastest growing entertainment sectors in the United States.’
In a statement sent to GamesBeat, though, NetEase addresses the general issue of its future plans but manages to avoid answering the key question.
‘Our ‘two-pronged’ approach, proposed in 2022 (combining self-research and investments to explore overseas markets), is still actively progressing and yielding positive results,’ reads the statement.
‘As far as overseas business efforts are concerned, NetEase has not wavered in its global expansion plans,’ it reads, highlighting success stories like Marvel Rivals and survival game Once Human.
‘These projects demonstrate NetEase’s ability, along with our talented development teams, to produce high-quality games loved by players worldwide.’
At no point do they deny planning to shut down all or most of their Western Studios, but the do admit to scaling down two of studios at the end of 2024.
‘This represents only a small portion of our overseas studio portfolio. Our studios in North America, UK, Spain, and Japan all continue to refine and develop their ongoing game projects,’ they insist.
NetEase also refuted the idea that the aforementioned tariffs have had any effect on its strategy, or at least not yet. ‘We are mindful of any developments in international trade. However, our decisions have been based solely on business evaluations and not influenced by other factors.’
Could NetEase’s other studios like the No More Heroes developer be hit with layoffs too? (Grasshopper Manufacture)Email [email protected], leave a comment below, follow us on Twitter, and sign-up to our newsletter.
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