NetEase Founder Nearly Cancels Marvel Rivals Over IP Concerns

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 reveals that NetEase CEO and founder William Ding came close to canceling the game due to his hesitations about using licensed intellectual property (IP).

According to Bloomberg, Ding is currently implementing significant changes at NetEase, including job cuts, studio closures, and a withdrawal from overseas investments. The aim is to create a more focused portfolio to combat a recent decline in growth and to better compete with industry giants like Tencent and MiHoYo.

The report indicates that Marvel Rivals was nearly a casualty of this strategy. Ding reportedly resisted the idea of paying for the use of Marvel characters and attempted to convince artists to create original designs instead. The attempted cancellation reportedly cost NetEase millions, but ultimately, the game was released and has since enjoyed tremendous success.

Despite this, NetEase's restructuring efforts continue. Earlier this week, the Marvel Rivals team in Seattle was laid off, with the company citing "organizational reasons." Over the past year, Ding has also halted investments in international projects, having previously invested in studios such as Bungie, Devolver Digital, and Blizzard Entertainment. The report suggests that Ding views games that do not generate hundreds of millions annually as not worth the company's time, although a NetEase spokesperson clarified to Bloomberg that the company does not set "arbitrary blanket numbers" for determining a new game's viability.

Employees speaking to Bloomberg have described internal challenges at NetEase, attributing them to Ding's unpredictable leadership style. They claim that Ding frequently makes swift decisions and changes his mind, pressures staff to work late, has recently appointed numerous recent graduates to leadership positions, and has canceled so many projects that NetEase might not release any games in China next year.

NetEase's retreat from game investments coincides with a period of uncertainty in the gaming industry, particularly in Western markets. The industry has faced consecutive years of widespread layoffs, project cancellations, and studio closures, compounded by the underperformance of several high-cost, high-profile games despite lofty expectations.