NetEase Games is reportedly “pulling back” on its international operations, with cuts to funding and support underway, and potential studio sales on the menu. The report arrives courtesy of Stephen Totilo’s Game File, which detailed an emerging pattern at NetEase.
Over the last few years, the conglomerate has announced a slew of investments in international game studios, with support given for ventures from many games industry veterans. That includes support for newer studios like Jar of Sparks, Worlds Untold and Liquid Swords, as well established studios like Grasshopper Manufacture, Quantic Dream, and Nagoshi Studio.
As noted by Game File, many of these studios are now facing a combination of “production freeze, spending cuts, and the need for new funding.” Operations at Worlds Untold were suspended and jobs cut in November 2024, just a year after the studio unveiling. Jar of Sparks was impacted by a similar fate, after having been announced in July 2022. Liquid Swords, meanwhile, was recently forced to lay off staff.
Per sources speaking to Game File, this is believed to be the beginning of a push from NetEase to cut its non-Chinese studios, with these now actively being “shopped around” to new buyers. One source told Game File that NetEase plans to fully divest itself from its overseas teams – a move which could inspire a wave of closures, in the event that no new buyer steps in.
Read: NetEase reveals Marvel Rivals has 40 million players, days after staff layoffs
Per a further report from Bloomberg, it appears some studios have been directed to wrap up their ongoing projects, with no further funding in the pipeline. It’s unclear if that means projects are cancelled – but the reality is further funding is necessary to continue projects already in the works, including the latest games from Nagoshi Studios and others.
In a response to Game File (via VGC), NetEase Games stated it would continue to invest in its “global business” as it “actively recruits and nurtures talent” but it did acknowledge organisational structure changes underway, which aimed to improve overall performance and growth.
“NetEase Games has a clear understanding of our development trajectory and areas of strength. Many of our strategic decisions are firmly grounded in these core areas,” the studio said.
“At the same time, we acknowledge that we are still in the early stages of exploring single-player game development and operations. This makes us more cautious when evaluating such products and assessing the associated risks and opportunities, particularly in today’s fast-changing and highly competitive environment.”
“[William] Ding [CEO] stated on the recent earnings call that NetEase is committed to supporting really high quality studios and master creators. That is the company’s strategy, and there is no change in this plan. For any studio globally, it behooves us as a responsible commercial business to frequently evaluate the progress, viability, and potential for success of our products and teams.”
At this stage, it’s unclear what NetEase Games’ next steps are, and which studios may be facing a loss of funding or sale by NetEase. We’re likely to hear much more in the coming months.
