If you're a gaming industry insider, you've likely heard about the high-stakes lawsuit between Jeff Strain, co-founder of ArenaNet and co-creator of State of Decay, and NetEase, the Chinese gaming giant behind Marvel Rivals. The Strains, along with their company Prytania Media Group, are seeking a staggering $900 million in damages, accusing NetEase of orchestrating their studio's downfall through malicious actions.
The case, originally filed in Louisiana's civil district court and later moved to federal court, centers on allegations that NetEase spread false rumors among investors, claiming the Strains engaged in fraudulent activities with Prytania Media. This led to the devaluation of their studio and ultimately its closure. The complaint paints a picture of a once-thriving company that fell victim to insidious corporate sabotage.
When NetEase initially invested in Crop Circle Games, one of Prytania's subsidiaries, things seemed promising. However, tensions arose as NetEase reportedly pressured the Strains to maintain a low profile regarding their foreign investment to circumvent U.S. regulations under CFIUS. The complaint further alleges that NetEase sought to conceal its ties to the Chinese Communist Party, drawing parallels to similar accusations against Tencent.
As the relationship soured, the Strains claim that NetEase's actions created chaos within Crop Circle Games. Layoffs and furloughs followed, leaving staff confused and demoralized. The Strains argue that NetEase's whispers of financial misconduct led to a domino effect, causing other investors to withdraw support. By the time Prytania Media closed its doors, its once-$344 million valuation had plummeted dramatically.
Annie Strain later attributed the company's woes to external factors, such as the broader economic downturn, while hinting at an unpublished Kotaku article. Yet, Prytania's remaining subsidiary, Possibility Space, shuttered shortly thereafter. Despite these events, neither NetEase nor fraud allegations were directly referenced.
Prytania Media and the Strains are now suing NetEase for defamation, unfair trade practices, tortious interference, and negligence. Their legal team argues that the damages sought reflect three times the company's previous valuation.
In response, NetEase denied all claims, emphasizing its commitment to ethical business practices and expressing confidence in the legal system to reveal the truth. As the case unfolds, it remains a contentious chapter in the intersection of international gaming and corporate intrigue.
