NetEase Faces $900 Million Lawsuit: Shocking Allegations Unveiled!

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Summary

  • NetEase Games has been sued for $900 million by State of Decay co-creator Jeff Strain and his wife Annie Strain.
  • The Strains accuse NetEase of defamation and damaging their game publishing business, Prytania Media.
  • NetEase has denied the allegations and says it will “vigorously” defend itself in court.

Jeff Strain, a co-creator of State of Decay, along with his wife, have initiated a lawsuit worth $900 million against NetEase Games. The lawsuit alleges defamation and unethical business practices by NetEase, stating that their actions significantly harmed the game publishing company owned by the Strains, Prytania Media.

Back in 2024, I found myself embroiled in a tale that started when Kotaku journalist Ethan Gach contacted Jeff Strain about the shutdown of Prytania Media’s affiliate, Crop Circle Games. In their discussion, Gach accidentally shared confidential information about a work-in-progress game, Project Vonnegut, being developed at Possibility Space, another Prytana subsidiary. Later on, Strain asserted that these disclosures were the key factor in the dip of investor trust, which ultimately prevented Crop Circle Games from obtaining additional funding and eventually led to its demise.

In January 2025, the Strain couple filed a lawsuit against NetEase, claiming that they had spread harmful rumors within the gaming industry, causing investor trust in Crop Circle Games to diminish. Furthermore, the Strains stated that their relationship with NetEase grew progressively antagonistic when they sought confirmation that NetEase was adhering to U.S. foreign investment laws. NetEase reportedly refused to cooperate because it would have implied connections between the company’s executives and the Chinese Communist Party (CCP), which they wished to keep private.

NetEase Denies Strains’ Allegations, Plans to Fight “Vigorously” in Court

The lawsuit also claims that Activision Blizzard executives experienced feelings of intimidation during contract talks for a 2023 licensing agreement with NetEase. In response, NetEase has firmly dismissed all accusations, declaring in a statement to Polygon that the charges are baseless and they will aggressively contest them. NetEase contends that their reputation as a global gaming corporation is self-explanatory and maintains faith that the court process will reveal the true causes of Prytania Media’s difficulties. Simultaneously, the case has been transferred to a federal court, where it now falls under the jurisdiction of a judge.

At a point when NetEase is facing intense public review due to recent business actions, it so happens that this legal issue arises. As recently as last month, the company dismissed some key Marvel Rivals developers, including the game’s director, as part of drastic cost-cutting efforts triggered by Q4 FY2025’s financial shortfall. Since then, several studios under NetEase’s ownership have been affected, with some experiencing budget cuts, operational pauses, layoffs, and even possible closure. There are reports suggesting that NetEase is trying to sell off many of its studios to different publishers in an attempt to recover financially. However, the ongoing Strains’ lawsuit could potentially make these transactions much more complicated.

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2025-03-19 22:04