Marvel Rivals Almost Got Scrapped Pre-Launch: Inside NetEase’s Cost-Cutting Controversy

Marvel Rivals Layoffs and Surprising Near-Cancellation
Earlier this week, NetEase let go of the US-based developers behind Marvel Rivals, despite the game’s impressive milestone of attracting over 40 million players. According to a recent report from Bloomberg, discussions took place about canceling Marvel Rivals before it ever hit the market—a move that stunned fans and industry onlookers alike, given the game’s existing popularity.

Why NetEase Considered Axing Marvel Characters
NetEase CEO William Ding reportedly contemplated canceling the game due to concerns about paying Disney for the use of iconic Marvel heroes such as Spider-Man and Wolverine. Some artists were allegedly tasked with creating original NetEase characters to replace these recognizable faces. Although these changes never materialized, the abandoned project direction apparently cost the company millions of dollars in wasted development time. A NetEase spokesperson, however, denied this account, highlighting that NetEase and Marvel have maintained a close relationship since 2017.

Layoffs Despite Success
With the sudden dismissal of the Seattle-based design team, fans began to question why a seemingly thriving game would lose its developers. In an official statement, NetEase explained, “We recently made the difficult decision to adjust Marvel Rivals’ development team structure for organizational reasons and to optimize development efficiency for the game. This resulted in a reduction of a design team based in Seattle that is part of a larger global design function in support of Marvel Rivals.”

Broader Project Shutdowns at NetEase
Reports also suggest Ding has withdrawn support for around a dozen other gaming projects, potentially leaving NetEase’s China-based studios without any major releases next year. Outside of China, NetEase has shuttered or paused operations at several of its acquired developers, including Visions of Mana creator Ouka and Untold Worlds, a studio founded by a former BioWare veteran. Rumors indicate that fewer than 60 employees remain across NetEase’s overseas studios as the company scales back its international investments.

Japanese Studios in Limbo
In 2022, Yakuza/Like a Dragon creator Toshihiro Nagoshi joined NetEase to establish his own development team. Although Nagoshi has yet to confirm what his studio is working on, both his team and other Japanese studios under NetEase—such as Suda51’s Grasshopper Manufacture—have reportedly been allowed to finish their current projects. However, the company has no apparent plans to provide further funding or promote any future titles coming from its Japanese branches.

Warhammer MMO and Future Overseas Plans
NetEase’s first western studio, Jackalyptic Games, is developing a Warhammer MMO announced in 2023. While details remain scarce, early impressions from other publishers have reportedly been positive. In a statement to Bloomberg, Ding reiterated NetEase’s commitment to its overseas teams. Yet, Game File claims that NetEase may be looking to sell off its non-Chinese studios, potentially leading to additional closures if these teams fail to secure alternative funding.

A Tumultuous 2025 for Gaming
The year 2025 continues to be a challenging time for the video game industry as a whole, with multiple studios facing layoffs or shutting down entirely. Despite Marvel Rivals finding a substantial player base, internal cost-cutting measures and licensing disputes appear to have placed the future of this high-profile project—and NetEase’s broader global portfolio—in jeopardy.