Layoffs at Marvel Rivals Reflect Broader Workforce Reductions at NetEase Games

Earlier this week, NetEase shook the gaming world with unexpected job cuts at its Marvel Rivals development studio in Seattle. This move left many wondering why the Chinese gaming giant decided to make such cuts around a project that was clearly thriving. Marvel Rivals, since its launch in December, has captivated more than 40 million players, contributing significantly to NetEase’s impressive $2.9 billion in gaming and services revenue during that particular quarter.

There were rumors floating around that Ding, the billionaire CEO, had reservations about the Marvel Rivals project even before it hit the shelves. Allegedly, he hesitated at paying Disney hefty licensing fees to feature Marvel’s iconic superheroes and villains, and at one point, even contemplated replacing them with original designs created by NetEase’s own artists. However, NetEase has refuted this claim, according to Bloomberg.

Over the past year, NetEase has been pulling back from several studios outside China. This includes divesting from Worlds Untold, a Vancouver-based developer led by ex-BioWare creative Mac Walters; Jar of Sparks, founded in Seattle by Xbox veteran Jerry Hook in 2022; and Ouka Studio in Tokyo, known for developing Visions of Mana for Square Enix. Locally within China, Ding has reportedly made similar reductions, which are so significant that major releases from NetEase’s Chinese studios might be off the table until 2026.

Following a Bloomberg report, Game File reported on Friday that there are plans for NetEase to withdraw from “the majority of its overseas teams.” This could affect more than a dozen studios that have been supported by the Chinese company. Potentially in the firing line are studios like T-Minus Zero Entertainment, founded by former BioWare Austin VP Rich Vogel, and Fantastic Pixel Castle, which is currently working on a fresh fantasy MMORPG under the guidance of game designer Greg Street, who has previous experience with World of Warcraft and League of Legends. NetEase also acquired Grasshopper Manufacture and Quantic Dream in 2021 and 2022, respectively.

For fans eagerly awaiting new works from the creators behind the Yakuza/Like A Dragon series, the news may come as a disappointment. It seems NetEase has decided to rein in the funding and development time allocated to new projects from Japanese studios, with no plans to actively promote or market them. On the brighter side, there’s still plenty to look forward to from Ryu Ga Gotoku Studio, including a fresh Virtua Fighter and the intriguing Project Century.

The job cuts at NetEase’s international studios reflect a broader wave of uncertainty that’s been sweeping through the gaming industry, which has been hit with significant reductions in recent years.

Update: With new insights from Game File, the situation appears even more concerning, as NetEase’s intentions to scale back from overseas studios become clearer.