One of the biggest internet tech companies in China, NetEase, announced today that its NetEase Capital Venture arm is investing $2.5 million in the independent video game developer Reforged Studios in an effort to increase its brand presence in the West. The money will go toward giving the studio additional resources to both “accelerate and enhance development projects both existing and new.” At a time when many US companies are looking to China for its growth, NetEase is looking to expand in the opposite direction.
Based out of Helsinki Finland with an office in Los Angeles, Reforged Studios was founded in 2015 by a group of industry veterans who have worked at high profile companies like Riot Games, Blizzard Entertainment, Electronic Arts, Ubisoft and many more. It is currently working on its first game, an epic fantasy army battler, that is expected to release on mobile platforms in 2016.
With its main headquarters in Beijing, China and an office in San Francisco, NetEase offers a broad range of internet services, but is chiefly known for developing its own games in addition to operating licensed ones, mostly developed by Blizzard. These include popular titles such as Fantasy Journey to the West, World of Warcraft, Hearthstone, and StarCraft II among others. Reforged Studios is one of several key Western studios NetEase has invested in as part of its aggressive pursuit toward a “vision for globalization and expansion westward.”
[a]listdaily speaks to Amy Huang, Assistant Vice President of NetEase Capital, to find out more about what led to this investment.
What convinced NetEase to invest in Reforged Studios?
NetEase Capital is a venture arm of NetEase Inc. founded in 2012, initially with a $500 million fund for VC investments in early-stage technology companies and Reforged joins our portfolio of nearly twenty studios from around East to West, following Counterplay Games, Red Accent Studios, Motiga, Artplay, and many more mobile teams in China. These investments drive our goal to achieve complete globalization in the coming years, helping to expand our market successes in China overseas throughout Western regions and core markets around the world. As for Reforged specifically, the studio s leadership and talent that came together to form the studio offered a pedigree that s difficult to find elsewhere, and their passion for making great games for core audiences was something that matched our interests. That passion and vision, along with the experience of the team, drew us in and we look forward to a long-term relationship that sees them succeed.
$2.5 million is quite an investment, far exceeding the $500,000 offered by the NetEase Success Fund. Why such a high investment, and will Reforged still retain the rights, creative control, and full ownership of its game?
We see huge potential in Reforged and are excited to be making a sizable investment that will help them grow from an early-stage indie to a professional studio that can compete on a global scale.
NetEase Capital operates the same as most early stage VCs. As an equity investor, we look for long term returns. Reforged definitely retains creative control and rights of their company, and most certainly owns the IPs to their future games.
What are the benefits to investing in an independent developer like Reforged Studios?
Rather than a decision driven by the region, we were drawn to the talent pool that made up Reforged Studios and their future potential. Of course, the Nordic region, especially Helsinki, is world renowned for its game development prowess, but the pool spread out between that location and Los Angeles made it especially appealing. Ultimately, in addition to the team, it was their passion and vision that drew us in, and we look forward to a long-term relationship that sees them succeed.
How does Reforged Studios fit in with other NetEase investments like Counterplay Games, Red Accent Studios and Motiga?
Reforged Studios is in good company alongside our further investments in the gaming space. This is a highly talented group of studios creating different kinds of games across mobile, PC, and online platforms. The talent of these studios and this range of games and platforms is key to our goal of globalization.
How important are video games to expanding NetEase’s growth in the West?
Video games are a core area of NetEase s business in Asia and the West, and will continue to be as we expand further across the globe.