NetEase’s U.S. game studio called Jackalope Games highlights the Chinese tech giant’s aggressive interntational push as the domestic game market faces headwinds.
Xing Yun | Costfoto | Future Publishing | Getty Images
Chinese gaming giant NetEase has launched its first fully-owned gaming studio in the U.S. as it ramps up international expansion against the backdrop of a slowing domestic market.
The development studio, called Jackalope Games, is based in Austin, TX and will be tasked with creating new PC and console games for NetEase. The studio will be headed by industry veteran Jack Emmert.
NetEase, which reported $9.8 billion of gaming revenue in 2021, has been pushing aggressively into international markets over the past two years against the backdrop of tighter regulation in China.
Last year, China introduced rules which cut the amount of time children under 18 can play online games to just three hours per week. Regulators also froze the approval of new gaming titles and games now need to get the green light from regulators to be monetized in China. Last month, regulators approved a new batch of games for the first time since July.
While its rival Tencent has been expanding internationally via acquisitions of other games developers, NetEase has chosen instead to take small stakes in companies and open up its own first-party studios.
The company, which already has two gaming studios in Japan, has focused on developing games with global appeal including “Lord of the Rings” and “Harry Potter” titles.
Hu Zhipeng, vice president at NetEase and a top boss of the technology giant’s video games business, told CNBC last year that he hopes 50% of the company’s gaming revenue will come from overseas in the future, up from about 10% at the time of the interview.
NetEase has traditionally been focused on PC and mobile games but has more recently begun focusing on developing titles for consoles such as Microsoft’s Xbox and Sony’s PlayStation. The U.S. studio could help with churning out console games.