NetEase Founder Nearly Canceled Marvel Rivals Over IP Concerns

NetEase's Marvel Rivals has been a smashing success, drawing in 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 the game almost didn't see the light of day, as NetEase CEO and founder William Ding was reportedly on the verge of canceling it due to his hesitations about using licensed intellectual property (IP).

According to Bloomberg, Ding has been actively restructuring NetEase to address a recent decline in growth and to better compete with industry giants Tencent and MiHoYo. This restructuring includes job cuts, studio closures, and a retreat from overseas investments. The aim is to create a more focused and efficient portfolio.

The report details that Ding's reluctance to pay for the use of Marvel characters led him to consider canceling Marvel Rivals entirely. He allegedly tried to convince artists to use original designs instead, and the attempted cancellation reportedly cost NetEase millions. Despite these challenges, Marvel Rivals was released and has achieved significant success.

Yet, the restructuring at NetEase continues. Earlier this week, it was announced that the Marvel Rivals team in Seattle was laid off for "organizational reasons." Over the past year, Ding has also stopped investing in overseas projects, pulling back from previous investments in Japanese and Western studios such as Bungie, Devolver Digital, and Blizzard Entertainment. The report suggests that Ding is only interested in games that can generate hundreds of millions annually, though a NetEase spokesperson clarified to Bloomberg that the company does not set "arbitrary blanket numbers" for determining a new game's viability.

Employees at NetEase have reportedly described a challenging internal environment, with Ding's leadership style characterized as volatile. He is said to make quick decisions and frequently change his mind, pressure staff to work long hours, and has recently placed many recent graduates in leadership positions. The report also notes that Ding's frequent project cancellations might result in NetEase not releasing any games in China next year.

This shift in NetEase's strategy occurs amid ongoing uncertainty in the gaming industry, particularly in Western markets, where there have been numerous layoffs, game cancellations, and studio closures over the past few years. Additionally, several high-profile and costly games have underperformed despite high expectations from their companies.