A recent Bloomberg report revealed that William Ding, the CEO and founder of the Chinese video game publisher NetEase, almost canceled the Marvel Rivals game due to a copyright disagreement with the Marvel Cinematic Universe’s owner, Walt Disney Co.
The report highlighted that Ding was reluctant to pay the entertainment and mass media conglomerate to use characters from the Marvel Universe, such as Captain America, Spider-Man, and Wolverine.
The NetEase head reportedly asked the game’s developers to create their hero designs, but the publisher eventually abandoned the idea. The company also reportedly lost millions due to the abandoned efforts and highlighted the radical changes Ding was initiating in NetEase. The report still indicated that a NetEase spokesperson confirmed that the rumors were false and that the publisher had maintained a close partnership with Walt Disney since 2017.
Microsoft Gaming CEO Phil Spencer has notably aired negative sentiment about licensing deals due to the complications they can cause when putting out games and maintaining them across different platforms for long periods.
A Yahoo Tech report revealed that licensing deals with Disney could cost companies millions of dollars across years of product sales.
The report further indicated the different outcomes gamers would experience if the NetEase CEO diverged from the original characters from the Marvel Universe. The possible decision raised speculations about whether Marvel Rivals would hit the same level of engagement if NetEase developers used their hero designs. Marvel Rivals launched late last year and managed to accumulate millions of gamers in the first month after release. The company revealed that Marvel Rivals now boasts about 40 million players globally.
NetEase restructures Marvel Rivals’ development team
NetEase announced in an email this February that the game publisher was initiating a restructuring for the Marvel Rivals development team for organizational purposes. The publisher laid off the Marvel Rivals game director, Thaddeus Sasser, and the Seattle team, as confirmed by several laid-off employees on LinkedIn. Sasser mentioned in a LinkedIn post that the layoff came despite his team delivering a massively successful game.
The Marvel Rivals director highlighted the tough times experienced in the gaming industry post-pandemic as a possible reason for the job cuts. Several companies in the industry, including Ubisoft, Sony Interactive, Electronic Arts, and Microsoft, have laid off hundreds of employees in the past 2 years. Sasser still thanked his teammates and encouraged the public to help find the former Marvel Rivals development team jobs elsewhere.
A source close to NetEase reportedly mentioned that Ding’s restructuring plan was among some of the radical decisions the publisher’s boss has made over the past year. The decisions have caused worry among remaining employees that Ding was becoming more volatile.
The publisher has reportedly reduced its international investments to focus on fewer titles after Ding said that games with no potential to generate hundreds of millions of dollars were not worth pursuing. Over the past few months, NetEase has also initiated several other layoffs while closing and idling several gaming studios, including Canada’s Jar of Sparks and Worlds Untold and Japan’s Ouka studio.
The Bloomberg report also revealed that the organizational changes expected would either make or break the company. The report speculated that a successful reorganization would better position NetEase to compete with Tencent Holdings Inc., Mihoyo Co., and other upcoming competitors.
The publisher’s revenue growth slows down
The recently released NetEase financial report for the fourth quarter of 2024 revealed a slowdown in the publisher’s revenue growth. The financial report also highlighted that the net revenue of about $3.7 billion was 1.4% lower than the amount recorded in the 2023 Q4. Youdao and NetEase Cloud Music revenues were also down 9.5% and 5.3% compared to 2023’s Q4 revenue, respectively.
The results were despite the extensive success Marvel Rivals received after its launch in December. The financial report indicated that while the gaming division’s revenue spiked by about 1.5%, the overall NetEase profit dropped by 2.6%. The publisher has notably been experiencing single-digit growth over the past 2 years. The Q4 2024 decline was also synonymous with the past 2 quarters.
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