It’s hard to see a studio with big-name leadership and ambitious plans close before its first trailer drops. That’s exactly what’s happening at NetEase. Worlds Untold, the studio founded by Mass Effect writer Mac Walters was announced in November 2023. Yet, it was shuttered almost exactly a year later. Jar of Sparks, led by Halo veteran Jerry Hook, met the same fate. Both talked about narrative-driven, blockbuster-style action games.
Why did NetEase pull the plug before anything hit the market?
Why NetEase’s Global Studios Never Got Off the Ground
For the last several years, NetEase has pursued a bold overseas expansion. Veteran-led studios in North America, Europe, and Japan were supposed to show that the company could play on the same stage as Activision, EA, or Sony.
Western studios are expensive to run. Language barriers, remote workflows, and high burn rates stacked up against them. For NetEase, the payoff never came. Marvel Rivals is a bright spot, but overall revenues haven’t justified the billions poured into these international bets. Instead, NetEase found itself managing a growing list of studios with no products and no clear timelines.
A Change in Strategy
The closures aren’t isolated. Ouka Studios in Tokyo, launched in 2020, is winding down too. Reports suggest more than a dozen other international teams could face the same fate unless they find outside funding. NetEase now frames the move as “ongoing evaluation of market conditions.” In other words, the company is cutting costs. They’re divesting from projects without momentum, and returning focus to where its core strength lies: China.
It’s a recognition that NetEase’s Western expansion was unsustainable under its current model. Running multiple AAA-style studios without a proven hit became a liability, not an asset.
What It Says About NetEase
The bigger issue isn’t just the closures, it’s what they signal about NetEase’s global ambitions. Can the company translate its domestic dominance into international success? The early answer seems shaky. Even with high-profile hires and creative freedom, NetEase struggled to manage these teams or turn potential into playable games.
At the same time, NetEase is far from weak. Black Myth: Wukong is one of the most anticipated titles of the decade, and its domestic teams remain skilled at creating hits for the Chinese market. What the closures suggest is not a lack of ability to make games, but a lack of strategy in building sustainable studios abroad.
NetEase wanted prestige, but prestige takes patience and patience costs money. By pulling the plug on studios like Worlds Untold and Jar of Sparks before they released a single game, the company signaled a retrenchment. Its future lies in focusing on proven strengths rather than speculative expansion.
Why close before launch? It comes down to a simple equation: high costs, low returns, and little appetite for risk. For NetEase, the lesson is clear. To compete globally, it needs more than star talent and ambitious pitches. It needs a strategy that lets ideas survive long enough to become games.
