NetEase's Marvel Rivals has taken the gaming world by storm, amassing 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 precarious situation that nearly led to the game's cancellation. According to the report, NetEase CEO and founder William Ding was initially reluctant to utilize licensed IP due to the associated costs, and even attempted to have the game redesigned with original characters.
The Bloomberg report outlines a broader strategy at NetEase aimed at streamlining operations amidst a decline in growth and intensifying competition with industry giants Tencent and MiHoYo. Ding's approach involves significant cost-cutting measures, including layoffs, studio closures, and a retreat from international investments. This restructuring effort reportedly came close to axing Marvel Rivals, with an attempted cancellation costing the company millions. Despite these internal struggles, the game was ultimately released to great acclaim.
The downsizing at NetEase continues, with recent layoffs affecting the Marvel Rivals team in Seattle, attributed to "organizational reasons." Over the past year, Ding has also pulled back from overseas investments, previously made in studios such as Bungie, Devolver Digital, and Blizzard Entertainment. The CEO's philosophy, as suggested by the report, is that games not projected to generate hundreds of millions annually are not worth pursuing, although a NetEase spokesperson clarified that the company does not apply "arbitrary blanket numbers" to assess new game viability.
Internal unrest at NetEase is also highlighted in the Bloomberg report, with employees describing Ding's leadership style as volatile. Ding is said to make swift decisions, frequently change his mind, pressure staff to work long hours, and appoint recent graduates to key leadership positions. These actions have led to the shutdown of numerous projects, raising concerns that NetEase may not release any games in China next year.
NetEase's strategic withdrawal from game investments coincides with a period of uncertainty in the gaming industry, particularly in Western markets. The sector has faced consecutive years of widespread layoffs, project cancellations, and studio closures, compounded by the underperformance of several high-budget, high-expectation titles.
