Tencent and NetEase Rethink Japanese Investments

Chinese gaming giants Tencent and NetEase are reconsidering their investments in the Japanese market, citing disappointing returns on their ventures. NetEase is set to shut down its Ouka studio in Tokyo, retaining only a few staff to manage the release of its final titles, while Tencent has also scaled back its funding commitments and is frustrated by misaligned expectations with Japanese developers. Both companies initially sought blockbuster titles from Japan but have found a focus on smaller projects instead. Analysts suggest that the gaming industry is retrenching globally, with Tencent and NetEase increasingly scrutinizing their investments due to a recovering Chinese market. Despite these challenges, both firms remain committed to their partnerships with major Japanese developers like Capcom and Bandai Namco. The long-term nature of game development complicates immediate returns, leaving their future strategies uncertain.