NetEase, a prominent Chinese game publisher, has made the surprising decision to lay off several members of the development team for Marvel Rivals, including the game’s director, as reported by Kotaku. The move has come as a shock to many, given that the team-based PVP shooter has consistently ranked in the top ten on Steam since its release in December. Although a significant portion of the development team is based in China, the layoffs appear to be limited to North American staff, with the exact number of affected employees still unknown.

Thaddeus Sasser, the game’s director, expressed his disappointment on LinkedIn, stating, “This is such a weird industry. My stellar, talented team just helped deliver an incredibly successful new franchise in Marvel Rivals for NetEase Games… and were just laid off.”

Del Walker, a game artist, also shared his thoughts on Bluesky, saying, “I don’t get it, man. You make one of the most successful LIVE service titles of the generation, despite the world telling you LIVE service is dead – and still get laid off? What are we even doing at this point.”

Currently, Marvel Rivals holds the sixth position on Steam’s top seller list and has recently received its first major content update for Season 1, which coincided with the layoffs. The game has garnered positive reviews for its engaging Marvel lore and straightforward gameplay, and its first-month revenue is estimated to be over $130 million, making it very successful. This success story is particularly notable in the live service game genre, which has seen several titles cancelled, including some from Sony.

There are concerns that the US tariffs may lead to further layoffs in China-based studios. However, in a statement to VentureBeat, NetEase denied that it is abandoning its foreign investments and overseas gaming studios.

NetEase provided the following statement: “For 2025, we have an extensive pipeline of titles in development, featuring a variety of genres, including FragPunk, Ananta, and more. However, as part of our investment strategy, we started scaling down two of our studios at the end of 2024. This decision was based purely on business evaluations and not influenced by other factors. And this represents only a small portion of our overseas studio portfolio.”