China’s NetEase recruits Microsoft Xbox talent for new video games studio in Seattle

The Seattle studio is headed by Jerry Hook, former head of design on Halo Infinite, a popular first-person shooting game created by Microsoft’s Xbox video game brand
NetEase and its larger domestic rival Tencent Holdings have not secured official Chinese approval to publish any new games over the past year

NetEase

Ann Caoin Shanghai

Published: 5:30pm, 20 Jul 2022

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NetEase, China’s second-largest video gaming company, has opened a new studio in Seattle as the company pins its hopes on the US market amid a tough regulatory environment at home.

NetEase Games, the online games division of NetEase, said in a release that its new studio in Seattle, called Jar of Spark, would focus on “narrative-driven action games”.

The operation is headed by Jerry Hook, the former head of design on Halo Infinite, a popular first-person shooting game created by Microsoft’s Xbox video game brand. Hook was also a founding member of Xbox Live, the online multiplayer gaming service established by Microsoft in 2002.

China game approvals skip Tencent and NetEase again in favour of rivals

“It’s Jar of Spark’s mission to create a new generation of narrative-driven action games, with immersive worlds that will be filled with moments that gamers will want to share with each other,” NetEase said in the statement. “We aim to form a diverse and collaborative team of talented creators that will bring whole new worlds to life.”

It is perhaps no surprise that the NetEase studio picked Microsoft’s headquarters city of Seattle as its own base, given that all of its founding members so far are from the US tech giant’s gaming unit.

Apart from Hook, Jar of Spark’s creative director Paul Crocker, executive producer Greg Stone and gameplay director Steve Dyck all had previous roles in Halo Infinite.

“We have built games for some of the biggest companies in gaming, and now it’s time to take a shot at putting our own personal lightning in a bottle,” said Hook, adding that NetEase has given them a “strong creative-first approach”.

The Seattle operation, the second US studio for NetEase Games, reflects a trend among Chinese gaming companies to step up overseas expansion to escape an increasingly hostile market in China.

In May, NetEase Games announced the opening of Jackalope Games in Austin, Texas, led by veteran American game designer Jack Emmert, who has worked on City of Heroes, Neverwinter, Star Trek Online, and DC Universe Online.

Recognised by NetEase as a so-called AAA studio, the Seattle operation is expected to enrich the company’s offering of PC and console games such as Naraka: Bladepoint.

NetEase did not disclose the financial terms of the Seattle venture, other than to say it is a “first party” studio that will develop gaming titles in-house.

NetEase and its larger domestic rival Tencent Holdings have not secured official Chinese approval to publish any new games over the past year, as regulators slow the pace of new licenses after an eight-month hiatus since last July.

A screenshot from NetEase’s Diablo Immortal video game. Photo: Handout

NetEase has also hit a roadblock in its most recent launch of the highly-anticipated mobile game Diablo Immortal in China, which was postponed until further notice after its social media accounts were blocked due to “violation of relevant laws and regulations”.

However, the title still proved to be a hit after its overseas launch in June, ranking third in global revenue for Chinese mobile games that month, according to app analytics firm Sensor Tower.

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