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NetEase raises fears it is unloading its overseas game properties, hurting U.S. gaming

Chinese game companies may be forced to sell off their overseas holdings in U.S. game companies. That could cause an earthquake in gaming.

venturebeat.com

Such a move, which coincidentally is happening at the same time as China’s retaliation to U.S. tariffs, could send earthquakes through the global gaming industry and hurt U.S. game companies in particular. However, once contacted by GamesBeat about these fears, NetEase denied it is dismantling its far-flung investments and overseas game studios.

Based on our reporting, game industry insiders said that NetEase has been directed to divest its overseas holdings. Among NetEase’s big recent hits is Marvel Rivals, but yesterday members of the Seattle team that developed the game along with a team in China said they had been laid off. This was after the game brought in $136 million in its launch month of December.

But sources we interviewed said that the Marvel Rivals team being fired by NetEase is just the start. Those sources said the company is losing its will to make games using overseas staff. Part of that reason is the high cost of U.S. developers in particular. Another reason is that China’s game developers have also matured enough to make triple-A games, as seen by the success of China-based Game Science’s Black Myth: Wukong, which has sold tens of millions of copies.

It’s possible that NetEase plans to exit all international investments and holdings, including wholly owned studios. Some of that will happen through layoffs, and some could happen through sales of studios. But it’s unlikely that NetEase will turn a profit on those investments if it plans to act quickly. Again, NetEase denied this, and we’ve included their statements below.

 

[ReBurn]

Kiss those west coast wages goodbye.

 

[Blank Space Invader]

Big business ruined video games.

 

[Angry_Megalodon]

"Again, NetEase denied this, and we’ve included their statements below."

So, they are running a political piece (right in the fist line) against the statements from the company.

Peak journalism.

 

[Loomy]

Important to add that NetEase has denied this.

 

[adamsapple]

Important to add that NetEase has denied this.

Yeah, that part is in the OP.

 

[bitbydeath]

Had to Google them, the only big studio they seem to have under them is Quantic Dream.

Rip

 

[Last Hearth]

NetEase denying it means nothing. If as the report says they've been told by the CCP to divest, if they admit it they will get lowballed by any potential buyer knowing they have no choice but to sell, so they will of course deny to avoid that.

 

[PSlayer]

With the videogame industry decentralizing around the world it is going to get harder and harder to justify the 6 figure salaries and gigantic team sizes that american studios usually have. There is no easy way out of this.

People will have to make peace with the fact they will have to move out to cheaper cities where they can get a paycut and stay competitve or else their jobs will be outsourced.

 

[Loomy]

Had to Google them, the only big studio they seem to have under them is Quantic Dream.

Rip

They're one of the largest game companies in the world by revenue.

NetEase denying it means nothing. If as the report says they've been told by the CCP to divest, if they admit it they will get lowballed by any potential buyer knowing they have to no choice sell, so they will of course deny to avoid that.

Until Tencent starts doing the same, there's no reason to believe this is a directive from the government. They own a chunk of Epic, all fo Riot, parts of Ubisoft, Bloober, and a bunch of other studios.

 

[bitbydeath]

They're one of the largest game companies in the world by revenue.

Probably mobile jank.

 

[LectureMaster]

Yeah, that part is in the OP.

 

[Angry_Megalodon]

Netease's biggest shutdown is the Japanese studio developers of Visions of Mana. I guess that wasn't worth mentioning this time.

Visions of Mana Dev Reportedly Being Shut Down by NetEase - IGN

Chinese video game company NetEase has reportedly laid off most staff at Visions of Mana developer Ouka Studios with plans to shut it down altogether.

www.ign.com

 

[adamsapple]

edit: Wrong thread.