NetEase Founder Nearly Cancels Marvel Rivals Over IP Issue

NetEase's Marvel Rivals has proven to be a smashing success, attracting 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 journey the game took to reach this point, revealing that NetEase CEO and founder William Ding nearly canceled the project due to his hesitation in using licensed intellectual property.

According to Bloomberg, Ding is currently engaged in a strategic overhaul of NetEase, involving layoffs, studio closures, and the cessation of overseas investments. The aim is to create a more focused portfolio to combat a slowdown in growth and to better compete with industry giants like Tencent and MiHoYo. Amid these efforts, Marvel Rivals almost became a casualty. A source cited in the report mentioned that Ding was reluctant to pay for Marvel's licensed characters and attempted to push for the use of original designs. This near-cancellation reportedly cost NetEase millions, but ultimately, the game was released and has achieved remarkable success.

Despite the success of Marvel Rivals, NetEase's restructuring continues. Recently, the Marvel Rivals Seattle team was let go, with the company citing "organizational reasons" for the layoffs. Over the past year, Ding has also pulled back from investing in overseas projects, previously a significant focus with investments in companies like Bungie, Devolver Digital, and Blizzard Entertainment. Ding's reported stance is that only games capable of generating hundreds of millions annually are worth pursuing, though a NetEase spokesperson clarified to Bloomberg that the company does not impose "arbitrary blanket numbers" for assessing new game viability.

Bloomberg's report also highlighted internal challenges at NetEase, with employees describing Ding's leadership as volatile. Ding is said to make rapid decisions and frequently change his mind, pressure staff to work long hours, and has brought in numerous recent graduates to fill key leadership positions. There are concerns that the number of project cancellations might result in NetEase not releasing any new games in China next year.

NetEase's retreat from game investments coincides with broader uncertainty in the gaming industry, particularly in Western markets. The sector has faced several years of significant layoffs, project cancellations, and studio closures, compounded by the underperformance of several high-budget, high-profile games despite lofty expectations from their developers.