NetEase Founder Nearly Cancels Marvel Rivals Over IP Concerns

NetEase's Marvel Rivals has proven to be a smashing success, amassing 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 hesitance to utilize 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 the game ultimately launched to its current success.

Despite the success of Marvel Rivals, NetEase's restructuring efforts continue. Earlier this week, the Marvel Rivals Seattle team was laid off, with the company citing "organizational reasons." Over the past year, Ding has also halted investments in overseas projects, previously having invested in studios like 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 highlighted internal challenges at NetEase, attributing them to Ding's unpredictable leadership style. They describe Ding as someone who makes swift decisions and frequently changes his mind, pressures staff to work late, and has recently appointed numerous recent graduates to key leadership positions. It's also alleged that Ding 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.