Being one of the top two gaming giants in China, NetEase derives the majority of its revenue from games and related services. According to the financial reports, in both Q3 and Q4, those sectors represented around 79% of the overall net revenue, with other businesses including Youdao, “online services centered around content,” NetEase Cloud Music, a popular Spotify-like music app, and Innovative businesses and others, altogether taking the rest 21%. Therefore, the continuous YoY decrease in the gaming-related business might not be a positive sign for the company.
Amidst the trend of earning less, a corruption scandal might have pushed the CEO to take more control over the gaming-related business. Last November, a month before Marvel Rivals was launched, it was reported that a few game executives at NetEase were detained on anti-corruption charges, which mainly occurred in its distribution and marketing departments.
Last month, NetEase internally released a follow-up investigation report that said that in the past six months, there have been five criminal cases and nine violations. As a result, more than fifteen employees were fired and would never have a chance to work at NetEase again.
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