The gaming industry has been grappling with widespread layoffs, and NetEase’s recent decision to cut jobs at its Marvel Rivals development studio in Seattle is yet another blow. What makes this situation particularly puzzling is that Marvel Rivals has been a resounding success. With over 40 million players since its December launch, the game contributed to NetEase’s impressive $2.9 billion in gaming and services revenue for the quarter. Despite this, developers found themselves out of work, raising serious concerns about the industry’s sustainability.
Layoffs Despite Success: A Troubling Trend
Layoffs in the gaming industry often stem from financial struggles or project cancellations. BioWare, for example, downsized as it shifted its focus toward early-stage development of a new Mass Effect title. Ubisoft Leamington’s closure was attributed to “long-term stability” concerns. In many cases, studios are simply unable to sustain large teams when a game underperforms financially. However, NetEase’s decision appears to defy these conventional justifications.
Marvel Rivals has not only survived but thrived in a live-service market notorious for its high failure rate. Games like Redfall, Suicide Squad: Kill the Justice League, and MultiVersus failed to retain players and ultimately collapsed, leading to mass layoffs. In contrast, Marvel Rivals demonstrated remarkable player retention and engagement. Yet, despite this success, NetEase laid off a significant portion of its Seattle team, including developers responsible for level design and gameplay mechanics.
A Political or Strategic Shift?
While NetEase has not provided an official statement on the layoffs, speculation abounds. Bungie’s cinematic director John Ebenger suggested that NetEase is withdrawing investments from North America due to the current political climate. This comes after Chinese-owned TikTok faced a potential ban in the U.S., hinting at broader geopolitical tensions influencing corporate decisions. If true, this means that even successful studios are not immune to external pressures beyond their control.
Another theory posits that the layoffs were a strategic cost-cutting measure. Companies often scale down development teams post-launch, keeping only a skeleton crew to maintain live-service content. If this was the plan all along, it reflects a broader industry issue—where developers are seen as disposable assets rather than the backbone of a game’s success.
Backlash from Players
NetEase’s decision has not gone unnoticed by the gaming community. Players have taken to Steam reviews to express their discontent, with some refusing to support the game in protest. One user, with over 100 hours logged, wrote, “Entire design team and lead dev fired because… checks notes they made too much money. Stop playing until they get their jobs back.” Another review sarcastically congratulated NetEase for “vaporizing all goodwill” before they could spend money on the game.
While review-bombing is unlikely to reverse the layoffs, it highlights a growing frustration among players who recognize the instability that developers face. The sentiment is clear: even when a game is a massive hit, job security remains an illusion.
A Broader Industry Shift
NetEase’s layoffs are not an isolated incident. The company has reportedly scaled back investments in multiple international studios, including Vancouver’s Worlds Untold and Seattle’s Jar of Sparks. NetEase founder and CEO William Ding has even considered scrapping Marvel Rivals before launch due to Disney’s licensing fees, further signaling financial conservatism despite strong revenue figures.
Reports suggest that NetEase is planning to divest from a majority of its overseas teams. This could impact studios like T-Minus Zero Entertainment and Fantastic Pixel Castle, both led by industry veterans. Additionally, Japanese studios under NetEase’s wing, including one led by ex-Ryu Ga Gotoku Studio head Toshihiro Nagoshi, are facing reduced funding and promotional support.
The Future of Game Development
The gaming industry has always been volatile, but NetEase’s actions reinforce the troubling reality that job security is fleeting—even for those working on successful titles. If even a blockbuster hit like Marvel Rivals can’t guarantee employment, what does that mean for the broader industry?
For now, developers and players alike are left questioning the future of game development. Will companies prioritize long-term investment in talent, or will the industry continue to see skilled workers discarded as mere cogs in a profit-driven machine? Only time will tell, but for those affected by these layoffs, the industry’s ongoing instability remains a harsh and unforgiving reality.
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