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China's Major Game Development Companies are Laying Off Employees and Shutting Down Projects

By Cecil Gao
Jul. 22, 2022 updated 08:15

China’s game industry has seen a sharp decline in the first half of 2022. With a decrease in both the number of game players and revenue due to the pandemic and China’s game license restrictions, some of China's largest game development companies, including Tencent, 37Games, and NetEase, have started laying off employees and shutting down projects.

Last week, sources suggested that the entire Chengdu branch of 37 Games was laid off. According to other sources, the Chengdu branch is an art team for 37Games that has provided support for a number of projects.

A game that 37Games’s Chengdu branch supportedA game that 37Games’s Chengdu branch supported

Because of this, the layoffs in the Chengdu branch shocked many people, especially since the recent revenue of 37Games was not bad, with net profit increasing by 87.42% to 99.13% over the same period.

In this regard, 37Games released an official announcement on July 19, saying that this layoff belongs to the normal project staff optimization procedure.

According to a self-proclaimed former employee of 37Games, this is not strictly speaking a layoff but rather the dissolution of the entire Chengdu branch. Therefore, the employees only received a certain amount of their salaries instead of the compensation for layoffs as required by Chinese labor laws.

Online information shows that 37Games set up a Chengdu branch in January 2020 to focus on game development. 37Games has said that the purpose of setting up the Chengdu branch was to make better use of the regional advantage and optimize the R&D system.

Also, last week, NetEase employees said that NetEase Spark Studio has also been shut down, and Tie Lei, a senior game  developer invited by NetEase to join, has also left. As a developer with 16 years of experience, Tie Lei has been in charge of many famous MMO projects and has served as Senior Vice President of Perfect World.

Bu Liang Ren, a famous Chinese MMORPG that Tie Lei was in charge ofBu Liang Ren, a famous Chinese MMORPG that Tie Lei was in charge of

According to Tencent employees, on July 20, Tencent is planning to shut down its largest NFT marketplace Huan He this week, and Tencent has already informed lower-level managers within Huan He. Other sources also say that Huan He ceased operations in early July.

Source: Zaker ifeng IThome