NetEase Founder Reportedly Almost Canceled Marvel Rivals Because it Didn't Use Original IP

NetEase's Marvel Rivals, a resounding success with ten million players in its first three days and millions in revenue for NetEase, almost never launched. Bloomberg reports that CEO William Ding nearly canceled the project due to his reluctance to utilize licensed Marvel IP.

This near-cancellation reflects a broader strategic shift at NetEase. Ding is streamlining operations, reducing staff, closing studios, and scaling back overseas investments. The aim is to focus on a smaller, more profitable portfolio to combat recent growth stagnation and compete with industry giants Tencent and MiHoYo.

The report alleges that Ding's initial resistance to licensing fees for Marvel characters led to an attempt to replace them with original designs. This decision reportedly cost NetEase millions before the game's eventual release. The cost-cutting continues, however, as evidenced by the recent layoffs of the Marvel Rivals Seattle team, attributed by NetEase to "organizational reasons." Over the past year, Ding has also halted investments in overseas projects, reversing previous substantial investments in studios like Bungie, Devolver Digital, and Blizzard Entertainment. The report suggests a prioritization of projects projected to generate hundreds of millions annually, although NetEase denies using arbitrary revenue targets for game viability.

Internal sources describe a turbulent environment at NetEase, characterized by Ding's volatile leadership style. These sources describe rapid, often-changing decisions, pressure to work excessive hours, the appointment of recent graduates to senior positions, and a high rate of project cancellations – potentially leading to no new game releases in China next year.

NetEase's retreat from game investments coincides with broader industry instability, particularly in Western markets. Recent years have been marked by widespread layoffs, cancellations, and studio closures, alongside numerous high-profile game failures despite significant investment.