Marvel Rivals has amassed over 40 million players since its launch, but Chinese publisher NetEase has denied abandoning western studios after it laid off a number of developers from the game’s US development team.
In its latest financial report, the company also boasted the free-to-play hero shooter topped Steam’s global sellers chart after launch and had over 10 million registered users within 72 hours.
However, earlier this week NetEase laid off an unspecified number of employees from Marvel Rivals’ US development team, with game director Thaddeus Sasser breaking the news first. “This is such a weird industry,” he wrote. “My stellar, talented team just helped deliver an incredibly successful new franchise in Marvel Rivals for NetEase Games… and were just laid off!”
Netease stated afterwards the layoffs were a “difficult decision” made to “optimise development efficiency”. However, a new report from VentureBeat suggests there’s more to come.
Sources interviewed by VentureBeat said the company is losing its will to make games outside of China, in part due to the high cost of US developers. The success of games like Game Science’s Black Myth: Wukong also prove the AAA capabilities of China’s own development studios.
The report also highlights that recent layoffs have coincidentally occurred alongside the trade war between the US and China, which could have further repercussions in the global games industry.
NetEase has denied such allegations.
“As far as overseas business efforts are concerned, NetEase has not wavered in its global expansion plans,” reads a statement from the company to VentureBeat.
“Our ‘two-pronged’ approach, proposed in 2022 (combining self-research and investments to explore overseas markets), is still actively progressing and yielding positive results. For titles developed by the self-owned studios, we successfully launched games like Once Human and Marvel Rivals in 2024. These projects demonstrate NetEase’s ability, along with our talented development teams, to produce high-quality games loved by players worldwide. For 2025, we have an extensive pipeline of titles in development, featuring a variety of genres, including FragPunk, Ananta and more.”
NetEase did, however, acknowledge a “scaling down” of studios – something that has led to shutdowns and layoffs at an array of studios including Mass Effect veteran Mac Walters’ Worlds Untold, Halo Infinite head of design Jerry Hook’s Jar of Sparks and Just Cause creator Christofer Sundberg’s Liquid Swords.
“As part of our investment strategy, we started scaling down two of our studios at the end of 2024,” it said. “This decision was based purely on business evaluations and was not influenced by other factors. And 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.”
It continued: “We are very open and aim to leverage our company’s strengths and accumulated expertise to support all developers. In order to achieve this vision, we have implemented an evaluation process, which applies equally to all NetEase studios globally – both domestic and overseas.”
As far as the trade war is concerned, NetEase responded: “Regarding the tariff trade war, yes of course 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. We highly respect our gaming community in the US and their love and enthusiasm for our games is valued and appreciated.”
Could other Chinese games companies pull out of the US? All eyes are on Chinese conglomerate Tencent, the biggest games company in the world, which the US labelled as a military company last month. Tencent threatened “legal proceedings” in retaliation.
“While geopolitical concerns and cost pressures after two challenging years for the global video game industry are driving Chinese game companies to re-evaluate their US operations, this does not signal a withdrawal from operating and investing in studios overseas,” gaming analyst firm Niko Partners wrote yesterday. “It instead reflects a more selective and strategic approach to overseas investments, prioritizing projects with clear market potential – a business and fiscally driven strategy.”
Elsewhere in its financial report, NetEase stated wuxia action game Where Winds Meet surpassed 3m downloads within four days of its PC launch in China – combined with the later mobile release, the game had 15 million players within two weeks. A release outside of China is expected this year.
“We boldly pushed the boundaries of innovation once again in 2024, delivering groundbreaking gaming experiences that captivated players worldwide,” said CEO William Ding. “Our new hit titles not only redefined gameplay but also set new industry benchmarks, while our legacy franchises gained fresh momentum through striking enhancements in design, storytelling and immersive content. As our diverse game portfolio expands across more genres and engages an ever-growing global audience, we remain dedicated to fostering creativity and collaborating with top talent and strategic partners to shape the next wave of gaming trends.”
Marvel Rivals season 1.5 launches tomorrow, adding The Thing and Human Torch among other additions detailed in the patch notes. The developer recently U-turned on a decision to reset player ranks mid-season.
