Marvel Rivals: NetEase is sued for $900 million by State of Decay co-creator, accused of defamatory statements

A NetEase Games, known for its recently launched Marvel Rivals, is facing a billion-dollar lawsuit that promises to shake up the gaming industry even more. Jeff Strain, co-creator of State of Decay, and his wife, Annie Strain, both owners of the publisher Prytania Media, have filed a lawsuit against the Chinese giant, demanding US$ 900 million for alleged damages caused by "false and defamatory statements."

According to documents revealed by Polygon, the lawsuit alleges that NetEase made statements that led to the complete ruin of Prytania Media and its subsidiaries, including Crop Circle Games — a studio in which NetEase held a stake of around 25%. The lawsuit was filed in January 2024, and recently NetEase requested the case to be transferred to federal court.

A letter sent by Steven Griffith Jr., lawyer for the Strains and Prytania Media, directly to NetEase CEO, Ding Lei, summarizes the accusations against the company. "NetEase spread false and defamatory statements that caused the downfall of Prytania Media," Griffith accuses, as quoted in the document.

The Strains claim that NetEase's actions, including alleged rumors that Prytania Media had committed financial fraud, were devastating enough to justify the request for US$ 900 million in damages — a value three times higher than their previous estimate of the company's worth, around US$ 300 million.

According to the lawsuit, the situation worsened when the Strains tried to ensure that NetEase was complying with United States laws, especially regarding its stake in Crop Circle Games. However, they claim that the Chinese company became "increasingly hostile and aggressive" when questioned, avoiding confirming whether it was indeed following the rules of the US Treasury Department.

In a strong passage of the letter, Griffith quotes an alleged comment from a NetEase representative, who reportedly said:

 "I can share more details on the next call, but, in general terms, we want to avoid attracting the attention of the CFIUS [Committee on Foreign Investment in the United States], which can be quite complicated. Geopolitical issues are already hindering our efforts in North America."

According to the Strains, the real reason for NetEase's refusal to cooperate would be the need to disclose "owners and board members who belong to the Chinese Communist Party (CCP), as well as CCP organizations within the company and the control they exert over NetEase."

Asked to comment, NetEase responded to Polygon saying that the accusations by the Strains "are completely unfounded" and that the company "will vigorously defend itself" in court.

"Our track record as a global gaming company speaks for itself. We remain committed to conducting our business with integrity. We are confident that the legal process will clarify the truth and reveal the real reasons behind the downfall of the Strains' studios," the company said in an official statement.

It is worth noting that NetEase Games is one of the largest game publishers in the world, responsible not only for Marvel Rivals, but also for major projects in partnership with Western brands such as Blizzard, Mojang (Minecraft), and Behaviour Interactive (Dead by Daylight).

Meanwhile, the situation of Prytania Media and Crop Circle Games, which now seem to be heading towards complete closure, highlights the dark and turbulent side of the gaming industry, especially when large investments and international partnerships fail.

The lawsuit is ongoing in American courts, and new developments are expected in the coming months. Whatever the outcome, the case is already generating significant repercussions, bringing to light not only commercial disputes but also geopolitical tensions that directly impact the global gaming sector.