NetEase has rapidly expanded into the Western gaming market by acquiring talented studios, partnerships, and smart investments. However, a new report suggests that the company is about to withdraw just as fast out of the West shortly.

The notable gaming publisher is allegedly planning to divest over a dozen Western studios. In other words, we will soon see NetEase either sell off notable teams or lay them off entirely. The exact number and what studios will be impacted are unclear, however.

Why it matters: NetEase possibly closing off or selling over a dozen Western game studios suggests that a major shift is coming to the wider gaming industry. It is a massive blow to the many talented Western developers under the publisher.

The company’s controversial decision could also impact studios like Rebel Wolves and Quantic Dreams.

As per an exclusive report by Game File, the conglomerate wants to reduce its presence in the Western gaming market. The NetEase representative refused to explain the reported claims but did explain that:

‘all studios and projects are in constant review and evaluation, and NetEase will determine changes needed to be made throughout that process.’

-NetEase Representative.

NetEase shared a similar stance while explaining why the Seattle-based Marvel Rivals game director and the rest of the team were laid off. The company said layoffs were necessary for organizational reasons and to optimize development efficiency for the game. Recent Marvel Rivals layoffs also suggest that the developer is divesting from the Western market.

The publisher has shares in a vast array of non-Chinese studios, including the likes of Quantic Dream and Rebel Wolves. So, the Detroit: Become Human and The Blood of Dawnwalker teams could suffer from the ripple effects of this withdrawal from the Western market.

The exact reasons for the massive upcoming divestments have not been made clear by NetEase so far, but we may learn more shortly.