NetEase Founder Nearly Cancels Marvel Rivals Over IP Concerns

NetEase's Marvel Rivals has undeniably struck a chord with gamers, amassing an impressive ten million players within just three days of its launch and generating substantial revenue for the developer in the subsequent weeks. However, a recent Bloomberg report sheds light on the internal turmoil that nearly led to the game's cancellation. According to the report, NetEase CEO and founder William Ding was hesitant to use licensed IP, preferring to utilize original designs instead. This reluctance reportedly led to an attempted cancellation that cost the company millions, though Marvel Rivals ultimately made it to release and achieved its current success.

The report also highlights a broader strategy shift at NetEase. Ding is actively reducing the company's footprint by cutting jobs, closing studios, and pulling back from overseas investments. The aim is to create a leaner, more focused portfolio to combat a recent decline in growth and to better compete with industry giants like Tencent and MiHoYo. This strategic downsizing has not been without consequences; just this week, the Marvel Rivals team in Seattle was laid off due to what the company described as "organizational reasons." Over the past year, Ding has also ceased investment in international projects, previously a significant focus with investments in companies such as Bungie, Devolver Digital, and Blizzard Entertainment. A company spokesperson clarified to Bloomberg that NetEase does not set "arbitrary blanket numbers" for determining the viability of new games, despite reports suggesting Ding believes games not generating hundreds of millions annually are not worth pursuing.

Bloomberg's report also paints a troubling picture of internal dynamics at NetEase, with workers describing Ding as a volatile leader. He is said to make quick decisions and frequently change his mind, pressure staff to work late, and recently appointed numerous recent graduates to key leadership positions. The report suggests that Ding's decisions have led to the shutdown of so many projects that NetEase might not release any new games in China next year.

NetEase's retreat from game investments coincides with a period of uncertainty in the global gaming industry, particularly in Western markets. The past few years have been marked by widespread layoffs, game cancellations, and studio closures, compounded by the underperformance of several high-profile, costly games that failed to meet expectations.