Overview: NetEase Ends Internal Studio Ties
In a surprising move, NetEase has severed ties with its internal development studio Fantastic Pixel Castle, less than two years after the studio formed to work on a new triple-A MMO project codenamed “Ghost.” The announcement signals a reevaluation of NetEase’s internal investment strategy as the publisher/search for external backing continues in a challenging market.
The studio, which opened its doors in November 2023, was tasked with delivering a major MMO under the NetEase banner. On the eve of this development cycle, studio head Greg Street conveyed that Fantastic Pixel Castle’s tenure as an internal NetEase studio would soon end. The primary concern: the entire team could become redundant if a suitable publisher or investor isn’t secured in the near term.
Street’s message, shared on LinkedIn, framed the situation as a broader market challenge. “NetEase Games has been very gracious and supportive of looking for another publisher for our game. However, in the current market environment very few deals are getting made for any game, let alone something on the scale of an MMORPG,” he wrote. He added that the team is actively pursuing publishing or investment options while supporting staff through the uncertainty and encouraging career opportunities elsewhere if needed.
NetEase Responds with Support for the Studio
NetEase responded to inquiries from Game Developer with a statement that reiterates a commitment to helping the studio survive through partnerships. A spokesperson emphasized that NetEase is assisting Fantastic Pixel Castle in finding publishing and investment partners and valued the efforts of all individuals within the studio ecosystem.
“Developing and investing in video game projects is inherently a long and complex process that requires ongoing evaluation and adaptation. We continue to refine our approach with diligence and discipline, carefully assessing both opportunities and risks in content development to guide investments across our global portfolio,” the statement read.
Context in a Turbulent Market
The news sits against a backdrop of broader industry shifts. Earlier this year, Bloomberg reported that NetEase aimed to tighten its overseas investments and focus on a smaller slate of evergreen, mass-market titles. The company countered by asserting its ongoing global expansion plans, while acknowledging that organizational changes could improve performance. NetEase has already shuttered other studios—most recently T-Minus Zero Entertainment in Austin—and now appears to be consolidating its approach to international development.
What This Means for Ghost and the Studio
Ghost, the MMORPG project at the heart of Fantastic Pixel Castle’s work, remains unresolved in terms of funding and publishing strategy. With the internal studio status in question, the fate of the game hinges on investors or publishing deals that can deliver the scale required by a modern AAA MMO. Greg Street and his team are pursuing all viable avenues, including talks with potential partners who could sustain the project and preserve team members’ employment elsewhere within the industry.
Industry observers note that the internal-studio model can be fragile in a market where big-budget online titles face long development cycles, high expectations, and uncertain returns. NetEase’s willingness to publicly discuss the process underscores a broader trend: publishers recognize the need to reevaluate where and how they invest in long-term franchises.
Looking Ahead: The Path to Surviving an Uncertain Market
For now, the key strategy is clear: secure a publishing or investment partner willing to take on a mammoth MMORPG project, while providing support to the staff affected by the transition. NetEase emphasizes its ongoing commitment to all studios under its umbrella, even as it recalibrates its internal and external development priorities.
As the industry watches, the question remains whether Ghost will find a publisher and whether Fantastic Pixel Castle can continue as a standalone entity or be absorbed into another project. The next steps will likely hinge on the strength of current market deals for AAA MMOs and the willingness of partners to back long-cycle, high-investment online games.
NetEase’s corporate narrative here reflects a cautious but ongoing commitment to global expansion, even as it navigates the challenging realities of funding and sustaining ambitious game development in a shifting landscape.
