Chinese tech giant NetEase has reportedly initiated a significant shift in its international gaming strategy. Since late last year, the company has been reducing staff and pausing projects at several of its overseas studios. Now, there are indications that NetEase is exploring opportunities to divest its non-Chinese operations. Sources suggest that the majority of its foreign teams may be up for sale or closure if buyers cannot be found. Despite these moves, NetEase maintains its commitment to global expansion, emphasizing ongoing evaluations of its projects and studios.
The restructuring includes affected studios such as Quantic Dream and Grasshopper Manufacture. Additionally, other entities like Anchor Point, GPTRACK50, and Skybox Labs face uncertain futures. The company recently downsized its US-based Marvel Rivals team, citing optimization of development efficiency despite the game's success. This strategic realignment comes as NetEase seeks to manage escalating expenses while asserting its dedication to expanding globally.
Strategic Retreat from Overseas Markets
Recent actions by NetEase indicate a strategic reevaluation of its international presence. Over the past few months, the company has taken steps to streamline its operations outside China. This includes job cuts and project pauses at various studios, reflecting a more cautious approach to global investments. The company’s decision to explore divestiture options for its non-Chinese entities underscores its intent to focus resources on core areas.
In late 2022, NetEase began scaling back activities at Worlds Untold, Jar of Sparks, and Liquid Sword. These initial reductions were part of a broader plan to reassess and optimize its international portfolio. According to anonymous sources, NetEase aims to sell off the majority of its overseas studios. Studios such as Quantic Dream and Grasshopper Manufacture are particularly vulnerable. If buyers cannot be secured, these renowned developers could face closure. The rationale behind this move is to mitigate rising operational costs and ensure sustainable growth. NetEase insists that all its ventures undergo continuous review, with changes made based on thorough evaluation. This approach allows the company to adapt swiftly to market dynamics and maintain financial stability.
Commitment to Global Expansion Amidst Challenges
Despite the restructuring efforts, NetEase remains committed to its global ambitions. The company emphasizes that its decision-making process involves rigorous assessment of each studio and project. While some teams have faced downsizing, such as the recent job cuts at the US-based Marvel Rivals creative team, NetEase attributes these moves to optimizing efficiency rather than abandoning its expansion plans. The company continues to assert its dedication to growing internationally.
Earlier this week, NetEase reduced its workforce at the Marvel Rivals team, a game that has achieved significant success since its launch. Despite this achievement, the company decided to restructure the team to enhance development efficiency. Reports suggest that during the game’s development, there were challenges related to licensing agreements with Disney, which nearly prevented its release. Nevertheless, NetEase managed to overcome these obstacles. The company’s stance on global expansion remains unwavering, even as it considers selling “as much as all” of its overseas game companies due to increasing costs. This strategic maneuver reflects a balance between fiscal responsibility and long-term growth objectives. By carefully managing its resources, NetEase aims to strengthen its position in the competitive global gaming industry.