Chinese game publisher NetEase raised fears with recent moves that it is unloading as much as all of its overseas holdings in U.S. game companies and elsewhere due to rising costs and other reasons.
Such a move, which coincidentally is happening at the same time as China’s retaliation to U.S. tariffs, could send earthquakes through the global gaming industry and hurt U.S. game companies in particular. However, once contacted by GamesBeat about these fears, NetEase denied it is dismantling its far-flung investments and overseas game studios.
Based on our reporting, game industry insiders said that NetEase has been directed to divest its overseas holdings. Among NetEase’s big recent hits is Marvel Rivals, but yesterday members of the Seattle team that developed the game along with a team in China said they had been laid off. This was after the game brought in $136 million in its launch month of December.
But sources we interviewed said that the Marvel Rivals team being fired by NetEase is just the start. Those sources said the company is losing its will to make games using overseas staff. Part of that reason is the high cost of U.S. developers in particular. Another reason is that China’s game developers have also matured enough to make triple-A games, as seen by the success of China-based Game Science’s Black Myth: Wukong, which has sold tens of millions of copies.
It’s possible that NetEase plans to exit all international investments and holdings, including wholly-owned studios. Some of that will happen through layoffs, and some could happen through sales of studios. But it’s unlikely that NetEase will turn a profit on those investments if it plans to act quickly. Again, NetEase denied this and we’ve included their statements below.
Based in Hangzhou, NetEase is the second largest game publisher in China, publicly traded on Hong Kong Stock Exchange and NASDAQ. David Kaye, founder of the venture capital firm F4 Fund, said in an interview with GamesBeat …