2/20/2025 — 4:15 am cst
Report —
NetEase, Inc is the second largest game publisher in China, publicly listed on NASDAQ (NTES) and the Hong Kong Stock Exchange (9999.HK).
The company plans to exit all international investments and holdings.
Worldwide, NetEase is the No. 5 game publisher by revenue. (Newzoo)
By market capitalization, they are within the world’s top ten game companies — (alongside Apple, Tencent, Google, Xbox, and Nintendo)
90% of the company’s game-revenue comes from China and 10% from the overseas market.
Timeline —
- Q1 2022: founder and chief executive 丁磊 (William Ding) desires 50% revenue from overseas market. (Yicai Global)
That percentage, if realized, would have added $10 billion USD in annual revenue to the company, and potentially added $40 billion USD in market cap.
- Q1 2023: finance chief says foreign revenues not expected before 2025. (SCMP)
- Q4 2024: company strategy is secretly reversed
- Q1 2025: entire global investment department is fired. (Pandaily)
清仓大甩卖 —
Games One can report that NetEase intends to divest all overseas investments. The assets assembled by global investments head Simon Zhu are now on a ‘fire sale’ — at a fraction of their previous valuation.
The global market for gaming acquisitions is depressed by macro-economic factors. Buyers are limited, and studios will be shut down, as has already started with the Seattle team responsible for Marvel Rivals.
While Mr. Zhu was still with the company as of 2/13/2025, his position is precarious.
Niko Partners forecasts near-term growth for China’s game industry. But the United Nations projects long-term population decline for the country — which means the mainland gaming market could deteriorate over time.
Without foreign expansion, NetEase faces limited future potential.