NetEase might be planning on pulling out of the global gaming market on a large scale. According to a report by VentureBeat, the company’s CEO, William Ding, has seemingly lost confidence in having overseas teams. While NetEase itself hasn’t made any such announcements recently, its recent closure of an R&D-centric studio that had helped with the development of Marvel Rivals might indicate one of the steps in this major move.
The move was seemingly foreshadowed by the founder of VC firm F4 Fund David Kaye, who spoke about geopolitical tensions, along with “the whims of certain CEOs” leading to Chinese companies pulling out of their international investments.
“China is in retreat: geopolitical tensions, some big bets not paying off, and the whims of certain CEOs mean that a massive pullback has begun,” said Kaye. “One MAJOR strategic that has made dozens of investments in the past several years is reportedly pulling the plug and divesting ALL investments outside China. Some will likely find buyers. Others will not be so lucky.”
According to VentureBeat, the company Kaye was referring to in this statement is NetEase, which has previously made large investments in various international gaming companies. This includes buying a stake in Bungie that was subsequently sold to Sony, as well as funding smaller companies like Devolver Digital and buying development studios like Quantic Dreams and Grasshopper Manufacture.
As such, the long-term effects of NetEase pulling out of its international investments will be far-reaching, affecting more than just titles like Marvel Rivals. For its part, NetEase itself has said that it is not pulling out of all of its international investments.
“As far as overseas business efforts are concerned, NetEase has not wavered in its global expansion plans,” said NetEase in a statement. “Our ‘two-pronged’ approach, proposed in 2022 (combining self-research and investments to explore overseas markets), is still actively progressing and yielding positive results.”
“For titles developed by the self-owned studios, we successfully launched games like Once Human and Marvel Rivals in 2024. These projects demonstrate NetEase’s ability, along with our talented development teams, to produce high-quality games loved by players worldwide. For 2025, we have an extensive pipeline of titles in development, featuring a variety of genres, including FragPunk, Ananta and more.”
The company did say that it was scaling down on its investment strategies at the end of 2024. This was because of business evaluations and not other factors, and it continues to support its studios throughout North America, the UK, Spain, and Japan.
“We are very open and aim to leverage our company’s strengths and accumulated expertise to support all developers,” it said. “To achieve this vision, we have implemented an evaluation process, which applies equally to all NetEase studios globally – both domestic and overseas.”
This de-emphasis on international teams by Chinese companies is echoed by Shanghai-based Pillar Legal partner Charles Yu, who spoke about high costs and management inefficiencies playing a role in future business decisions. This includes NetEase pulling out of its overseas investments and even laying off its overseas strategy investment team.
“However, it appears that Chinese game companies are less inclined to set up development teams in the U.S. or other Western countries due to concerns about high costs and management inefficiencies,” Yu said. “I think it is probably true that NetEase is scaling back its overseas investments. Recent news indicated that NetEase laid off the entire overseas strategy investment team and shut down several studios in 2024. However, NetEase never officially announced this news.”
NetEase is counted as among the top 10 gaming companies in the world in terms of market capitalisation and is currently valued at $68.4 billion. It’s joined by companies like Apple, Tencent, Google, Xbox, and Nintendo.
