NetEase CEO William Ding Restructures Company with Layoffs and Studio Closures Amid Profit Push
NetEase Inc., China’s second-largest gaming company, is undergoing a major restructuring under CEO William Ding, with hundreds of layoffs, studio closures, and a narrowed focus on high-revenue titles. The moves aim to bolster profitability amid slowing growth and fierce competition from Tencent and Mihoyo.
Restructuring and Financial Context
NetEase’s gaming division generated $11.6B in 2024 revenue, but growth has stagnated, with single-digit gains and recent quarterly declines. Gross profit fell 2.6% in Q4 2024, prompting Ding to shutter about a dozen games and cut underperforming projects. The company is now prioritizing “evergreen” titles like Eggy Party—a Tencent competitor—that encourage recurring spending. Egg Party is basically just a mobile knockoff of Fall Guys and is a huge hit in China.
Marvel Rivals’ Success
Despite accruing $200M in revenue and 40M s since its December 2024 launch, Marvel Rivals faced internal turmoil. Ding initially resisted paying Disney for Marvel IPs, leading to a scrapped redesign effort that cost millions. NetEase denied this, citing a “close partnership” with Marvel since 2017. This week, part of the U.S. creative team was laid off, though development continues under a China-led core team.
International Retreat
NetEase has closed or scaled back studios in Japan (Ouka), Canada (Worlds Untold), and the U.S. (Jar of Sparks), impacting projects like Visions of Mana. The company halted new investments in overseas studios and IP, focusing instead on domestic hits. Notable closures include Toshihiro Nagoshi’s (Yakuza) Ouka studio, despite ongoing projects for publishers like Square Enix.
Leadership Shakeup and Culture Shift
Ding, worth $32.5B, has assumed a more hands-on role, hiring finance-sector graduates for key positions and demanding extended work hours in China (though NetEase denies mandatory requirements). Longtime president Xiaojun Hui stepped down from management in 2023, signaling a leadership overhaul. Employees describe Ding as “volatile,” with abrupt strategy shifts impacting morale.
Industry-Wide Cost-Cutting
NetEase’s cuts reflect broader gaming sector struggles post-pandemic, with players favoring established titles and development costs soaring. Over 60,000 industry jobs were lost globally in 2023, including 900 at NetEase. Ding’s pivot mirrors trends toward risk-aversion, though critics warn it could stifle innovation.
Strategic Outlook
Ding reaffirmed for “high-quality studios and master creators” but emphasized profitability. releases like Warhammer Online (from Jackalope Games) face uncertain futures as NetEase prioritizes surefire hits. The company’s ability to balance fiscal discipline with creative ambition will determine its standing against Tencent’s dominance and Mihoyo’s meteoric rise.
NetEase’s restructuring underscores the precarious state of the gaming industry—where even billion-dollar giants must adapt or falter.
Further reading: Bloomberg