NetEase's recent decisions have been downright baffling, and it feels like they're just stumbling from one mistake to another.
It’s obvious that the company is desperately trying to hold onto something that's slipping away but their decisions don’t seem all that smart. In fact, it almost feels like NetEase is panicking and that's a dangerous thing for a company of its size.
One of the biggest red flags has been the way NetEase has handled its workforce. The layoffs at the Seattle Marvel Rivals team were completely unfathomable and hard to justify, especially after such a hugely successful launch. Even more troubling is the fact that these layoffs are in line with a wider pattern of the company cutting back on international ventures.
GamesBeat has noted that NetEase could be pulling back on its overseas game holdings, including those in the U.S., as it deals with higher costs and political challenges. NetEase has shot down the idea of completely ditching its overseas plans, but they did admit to scaling back some studios.
Marvel Rivals brought in $136 million in its first month alone—by all accounts, a major hit. Yet, instead of celebrating and building on that success, NetEase decided to downsize the very team responsible for it. That "optimizing development efficiency" excuse feels like a cop-out.
And it's not just Marvel Rivals. Ouka Studios, a NetEase subsidiary, was abruptly shut down the same day Visions of Mana launched in late 2024. Worlds Untold was yet another loss. One by one, NetEase's international projects and teams are being abandoned or drastically cut down. It's hard not to see the pattern when you look at these decisions.
The writing on the wall is clear: NetEase is pulling back from its Western ventures. The company appears to be refocusing all its efforts on China, where development costs are lower and the domestic market remains strong. NetEase is likely betting that it can replicate that formula while cutting out the overhead costs of running foreign studios. In their eyes, it's a win-win situation: spend less, keep development in-house, and still ship games that sell worldwide.
I get that running international studios is expensive, but NetEase is throwing the baby out with the bathwater. There's no way a company this big should be so short-sighted. The harsh reality is that major gaming companies have realized they can get away with slashing jobs while still pushing out products like it's business as usual. The worst part? It's becoming normalized.
The debate continues over whether NetEase’s moves are a well-considered restructuring plan or if they're simply panicking after failed attempts at global expansion. If this was part of some grand restructuring strategy, it sure doesn't look like it.
Some argue the company was forced to scale back because of government regulations and the economic climate, while others just see it as a way to save money after realizing they overestimated their shot at the Western market. Either way, it's not a good look.
If it was well thought out, they wouldn't be axing successful projects and talented teams so quickly. These decisions feel desperate. It feels like NetEase is scrambling to fix past mistakes and is willing to burn bridges along the way.
If companies like NetEase continue prioritizing profits over people, the gaming industry is headed toward a future where job security is non-existent, creativity is stifled, and only the executives at the top truly benefit.