NetEase CEO Hesitates on Marvel Rivals Due to IP Licensing Costs

Marvel Rivals from NetEase has proven a massive success, attracting ten million players within three days of launch and generating significant revenue for the developer in the weeks that followed. However, a recent report reveals that NetEase CEO William Ding nearly scrapped the project over concerns about using licensed intellectual property.

According to Bloomberg, NetEase is undergoing major changes, with Ding implementing job cuts, closing studios, and pulling back from international investments. The aim, as outlined in the report, is to streamline the company’s portfolio to counter a recent growth slowdown and better compete with industry giants like Tencent and MiHoYo.

The report indicates that Marvel Rivals was nearly canceled as part of this downsizing effort. A source claims Ding was reluctant to pay for licensed Marvel characters and pushed for original designs instead. This attempted cancellation reportedly cost NetEase millions, though the game ultimately launched and achieved widespread success.

Despite this, the company’s contraction persists. Earlier this week, the Marvel Rivals Seattle team was laid off, with NetEase citing "organizational reasons." Over the past year, Ding has also halted investments in overseas ventures, moving away from prior commitments to studios like Bungie, Devolver Digital, and Blizzard Entertainment. The report suggests Ding views games unlikely to generate hundreds of millions annually as unworthy of pursuit, though a NetEase spokesperson told Bloomberg the company does not rely on "arbitrary blanket numbers for determining the viability of a new game."

Bloomberg’s sources also described internal challenges at NetEase, highlighting Ding’s unpredictable leadership style. Employees noted his tendency to make swift decisions, frequently change plans, push for late work hours, and appoint recent graduates to key leadership roles. Additionally, numerous project cancellations have raised concerns that NetEase may not release any new games in China next year.

NetEase’s retreat from gaming investments aligns with broader uncertainty in the global gaming industry, particularly in the West. Recent years have brought widespread layoffs, project cancellations, and studio closures, compounded by several high-budget games underperforming despite lofty expectations.