A sort of gaming industry norm these days is that teams face layoffs when the game they created flops. However, the report that NetEase had laid off the team behind Marvel Rivals was a bit unusual considering the game’s massive success. The question that many have been asking is why. Here are two strong theories that likely inspired the decision.
The news of the layoff by NetEase was first shared by game director Thaddeus Sasser who has been with the company since January 2023. “This is such a weird industry,” he began in a lengthy post on LinkedIn that had over 1,600 reactions at the time of writing.
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“My stellar, talented team just helped deliver an incredibly successful new franchise in Marvel Rivals for NetEase Games…and were just laid off! Oh well! Times are tough all over – Let’s find these incredible people new jobs, because we all need to eat, right? :D”
Sasser’s account was corroborated by several other devs who also worked on Marvel Rivals including level designer Garry McGee. According to McGee, Marvel Rivals turned out to be a bigger hit than any of them anticipated.
“My team recently helped develop and launch Marvel Rivals, which turned out to be a bigger hit than any of us expected!” McGee wrote on LinkedIn a few hours ago. “Unfortunately, my team was also laid off. Strange times all across the industry indeed.”
Another level designer Jack Burrows also confirmed that he was impacted by NetEase’s decision. One message that resonated across all the posts of those impacted by the layoff was why NetEase would lay them off even after the huge success of Marvel Rivals.
“Welp, just got laid off from my job working on Marvel Rivals with NetEase,” Burrows wrote. “Was an enormous pleasure to work with my American coworkers who join me in this sad culling. Just couldn’t dodge that big boot I guess, no matter how big the success of the gig.”
Senior NetEase community manager Christopher Honour was also affected, a turn of events he called sad. This suggests that the layoff was broader than just the development team. NetEase has yet to comment on the development. Their latest update was a video promoting Marvel Rivals Season 1.5.
The theories behind NetEase’s Marvel Rivals layoffs
Although there are no credits on Marvel Rivals, it is believed to have been developed by teams in China and the United States (Seattle precisely). The Seattle team handled the level design. After its launch, Marvel Rivals pulled in 644,269 concurrent players on Steam, making it the 14th on the platform’s all-time highest concurrently played games.
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For context, this number is higher than the all-time highest concurrent players that other big hits like GTA 5, Apex Legends, Helldivers 2, and Path of Exile 2 were able to garner.
Theory 1
The first theory that tried to explain NetEase’s decision was that the company was pulling out of North America—which may be related to the heightening trade tensions between China and the Trump administration.
“The only insight I can possibly add is that I’d heard NetEase is pulling all investments out of NA,” wrote cinematic director John Ebenger on BlueSky. “Started last year. Are these layoffs all the NA design team? If so then it appears no, it doesn’t matter how successful your game is, corporate policy created by geopolitics and trade relationships do.”
However, NetEase still has investments in North America. BulletFarm founded with Call of Duty: Black Ops designer David Vonderhaar, Anchor Point founded with Control’s lead designer, Texas-based T-Minus Zero, and Bad Brain Game Studios all have the backing of NetEase.
Theory 2
The second theory was that NetEase exploited US talents to create a massive hit based on US IP in order to gain access to the US market (which is the biggest market for the superheroes the game was based on), and once they had hit their goal, there was no more incentive keeping the team.
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The CEO of Great Big Beautiful Tomorrow Chris Heatherly claimed this highlights the “untenable asymmetries in the access Chinese publishers have to our market vs theirs”. He added that “if this is allowed to go on we’re going to lose the US games industry to China. Not because we can’t compete, but because they are competing unfairly.”
“And their gonna do it with an assist from US IP holders like Marvel and US platform companies like Valve, Epic, Apple, Google, PlayStation and Microsoft, who all need to be considering right now whether they are willing to assist in killing off US game development.”
NetEase’s decision to lay off the Marvel Rival team just a few months after the game’s successful launch beats all logical reasoning. However, we have to hear the other side of the story to understand the reason for their decision. Hopefully, that happens soon.
