Why is NetEase massively divesting from Western assets and what does it mean in the context of the Chinese market

Just in the past few weeks, NetEase has cut funding for three Western studios. We explore what compels the company to reconsider its investments, what ties the affected teams together, and how applicable this trend is to other Chinese publishers.

In the past 12 months, at least six studios have been impacted by NetEase's decision to reassess its Western portfolio.

All the listed companies were started with investments from the Chinese giant, which was the key investor and majority owner:

• Worlds Untold — a studio by Mass Effect writer Mac Walters suspended operations in November 2024, a year after its inception;
• Jar of Sparks — led by Halo and Destiny 2 veteran Jerry Hook, the team froze operations in January 2025 after two and a half years of operation;
• T-Minus Zero Entertainment — the studio led by MMO genre legend Rich Vogel ceased operations in August 2025 but was revived in November as an independent company with new investors (possibly without Vogel's involvement);
• Fantastic Pixel Castle — the team led by Blizzard and Riot Games veteran Greg Street will close on November 17, 2025, two years after starting;
• Bad Brain Game Studios — the studio led by former Ubisoft Toronto lead producer Sean Crooks closed in November 2025, after approximately two and a half years of operation;
• Jackalyptic Games (originally Jackalope Games) — led by City of Heroes game designer Jack Emmert, this was NetEase's first studio in the USA and lasted three and a half years until November 2025.

It is unknown how much money NetEase invested in each studio. However, what connects these teams is clear.