When NetEase slashed jobs at its Marvel Rivals development studio in Seattle earlier this week, it was unclear why the Chinese game publisher would make cuts around such a successful project. Marvel Rivals has attracted more than 40 million players since its December launch, helping NetEase rack up $2.9 billion in gaming and services revenue during the quarter the game was released.According to a report from Bloomberg, the cuts to the North American team working on Marvel Rivals arent an anomaly. NetEase founder and CEO William Ding is reported to have cut hundreds of jobs, closed studios, and taken a firmer hand with the companys Japanese teams including the one led by former Ryu Ga Gotoku Studio head Toshihiro Nagoshi.Ding also reportedly floated canceling development of Marvel Rivals before it was released. The billionaire CEO is said to have balked at paying Disney a licensing fee for Marvels superheroes and villains, and considered replacing them with NetEase artists own hero designs. (NetEase denied this account, Bloomberg reported.)Over the past year, NetEase has divested from multiple studios outside China, including Worlds Untold, the Vancouver-based developer led by ex-BioWare creative Mac Walters; Jar of Sparks, the Seattle-based studio founded in 2022 by Xbox veteran Jerry Hook; and Ouka Studio, the Tokyo-based developer of Visions of Mana for Square Enix. Ding is reported to have scaled back studios locally as well, and those cuts are said to be deep enough that NetEases Chinese studios might not release any major titles in 2026.Shortly after Bloombergs story was published, Game File reported on Friday that NetEase plans to divest from the majority of its overseas teams, which could impact more than a dozen studios backed by the Chinese publisher. That could potentially encompass studios set up by NetEase in recent years, like T-Minus Zero Entertainment, founded by former BioWare Austin VP Rich Vogel; and Fantastic Pixel Castle, which is making a modernized fantasy MMORPG under World of Warcraft and League of Legends veteran designer Greg Street. NetEase also acquired Grasshopper Manufacture and Quantic Dream in 2021 and 2022, respectively.For Yakuza/Like A Dragon fans anticipating its former creators new works, theres some dire-sounding news. NetEase has reportedly curtailed additional funding and time for new titles from Japanese studios, and has no plans to market or promote them. At least fans will have more from Ryu Ga Gotoku Studio, including a new Virtua Fighter and Project Century to look forward to.NetEases layoffs at international studios are part of the larger trend of uncertainty in the video game industry, which has endured massive cutbacks in recent years. Update: This story has been updated with new reporting from Game File, which paints an even grimmer picture of NetEases plans to withdraw from overseas studios.