Yesterday, the industry was rattled with the sudden news that NetEase games, the publisher of Marvel Rivals, has shuttered the Seattle studio working on the game. NetEase did not make an official announcement, with game director Thaddeus Sasser suddenly breaking the news on his LinkedIn to help his colleagues find work.
This comes mere weeks after the Marvel Rivals’ successful launch, and even as it is clearly outperforming its live service peers like Apex Legends, and of course, Overwatch 2. But we may have gotten at least some clarity on NetEase’s decision.
Niko Partners’ Director of Research and Insights Dan Ahmad shared this information on Bluesky:
“Worth noting this round of layoffs only impacts the team in the US, not the core dev team in China.
It’s part of a broader reconsideration of NetEase’s overseas investments and studios. The firm has pulled funding from a number of overseas teams over the past year.
To clarify. This doesn’t impact the games operation and the current roadmap is still the plan
NetEase started its reevaluation last year, leading to funding being pulled / closures of studios in Japan and the US. The reevaluation, which is still ongoing, is being undertaken for multiple reasons.
It’s a bad look for NetEase to layoff a successful team, no matter the reason or how small the team is.
The previous layoffs or closures included studios where you could argue current performance / lack of results was the issue. Can’t make the same argument here.”
We aren’t quite clear on how much of this information may have been officially relayed by NetEase, perhaps to the Chinese public, or to their investors. It’s also not entirely clear how much is speculation. It may be that Ahmad didn’t elaborate on the ‘multiple reasons’ NetEase closed their Seattle and Japan studios because it could be an ethical conflict with his own work. Alternately, he may not want to direct undue anger, and potentially harassment, in a certain direction, which is reasonable if that were the case.
What we will point out is that as much goodwill NetEase has created with the way they were able to develop a successful game, there may have been reasons to be skeptical about the company from the start. Last March 2024, as NetEase and Marvel Games just announced Marvel Rivals, some developers alleged that NetEase didn’t pay them for their work in helping develop the game. Perhaps, unfortunately, we in the gaming press should have looked into the issue more at the time.
What we can say now is that this suggests that NetEase Games, who gained notoriety for making their dispute with Blizzard public, doesn’t seem to be upfront about their business when it doesn’t suit them. It’s now on NetEase’s own management to handle the backlash to their decisions, as it’s clear that they knew that a backlash would be forthcoming.
Part of what ruined Destiny 2’s and Overwatch 2’s reputation among gamers were rumors and allegations of bad work environments, following layoffs and resignations. Apparently that’s something NetEase didn’t take notes on when they were developing Marvel Rivals, but maybe that’s a lesson they should learn firsthand.
