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NetEase, China's second-largest video gaming company, has cut an undisclosed number of jobs involved in an "underperforming" project that will soon be shut down, according to a person with knowledge of the matter and Chinese media reports.
The lay-offs at the company's offices in southern tech hub Shenzhen affected employees involved in mobile game Hyper Front, a tactical team-based shooter that was launched on August 30 on the mainland, according to the person who asked to be anonymous because he is not authorised to speak to the media.
That followed NetEase's announcement last month that it would end the operations of Hyper Front because its performance failed to meet expectations, even after more than 10 million gamers made reservations online ahead of the title's release.
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"Not many" NetEase employees were involved in that game in Shenzhen, according to the person.
The job cuts were first reported on Friday by Chinese media. A report by digital outlet The Paper, which cited people close to NetEase, described the company's action as a workforce reduction affecting "a single product", not a mass lay-off at its Shenzhen offices.
NetEase did not immediately reply to a request for comment on Friday.
A promotional poster of NetEase's mobile shooter game Hyper Front. Photo: Sina alt=A promotional poster of NetEase's mobile shooter game Hyper Front. Photo: Sina>
In September, NetEase also announced the closure of part or all of the operations for four video games it runs on the mainland, including the domestic version of Pokemon Quest.
Tencent Holdings, which runs the world's largest video gaming business by revenue, and NetEase had scaled back many of their investments in Japanese studios amid a revival in the Chinese market on the back of Black Myth: Wukong, developed by Hangzhou-based studio Game Science.
NetEase had cut all but a handful of jobs at its Ouka studio in Tokyo, according to an August report by Bloomberg, which cited people familiar with the matter. NetEase also intended to shut its Shibuya outfit, which had opened in 2020.
Dismissing the Shenzhen staff involved in Hyper Front also showed that NetEase must contend with increased competition in the first-person shooter (FPS) genre on the mainland.
Tencent earlier this month said that Valorant and Delta Force, two popular FPS titles that it runs in China, have shown a broad appeal to young gamers across the country. Shanghai-based miHoYo, creator of Genshin Impact, is also reportedly developing a new shooter title.