Annie and Jeff Strain, founders of Prytania Media, are suing NetEase. They claim that the actions of the Chinese company led first to the closure of their subsidiary studios and then to the shutdown of Prytania Media itself.
- To start with, it's worth recalling that Prytania Media comprised game development studios including Crop Circle Games, Possibility Space, Dawon Entertainment, and Fang & Claw. All of them closed in 2024.
- In the announcement of Crop Circle Games' closure, it was stated that the studio ceased to exist due to financial issues amid a lack of interest from gamers in its unreleased debut game. In the closure of Possibility Space, Jeff Strain blamed the media, to which information about the studio's first title had been leaked, after which a potential publisher withdrew from the partnership.
- In January 2025, the founders of Prytania Media suddenly blamed NetEase for the closure of the studios and filed a lawsuit against it.
- In the lawsuit, the Strains stated that NetEase was an investor in Crop Circle Games, owning 20% of the studio. They claimed that shortly after NetEase invested in the developers, they received a letter from a senior manager of the Chinese company, Han Chenglin. He asked not to publicize the funding to avoid NetEase catching the eye of U.S. foreign investment regulators. The founders of Prytania Media tried to persuade NetEase not to violate U.S. laws, but the company reacted aggressively to their words.
- According to the Strains, at some point, they were contacted by the founder of the Transcend Fund, who mentioned that Han accused Crop Circle Games of fraud and embezzlement. Allegedly, studio management was transferring capital to other "subsidiaries" of Prytania Media and distorting financial reports.
- Amid the rumors, some investors decided not to work with Crop Circle Games anymore. Although Prytania Media denied the accusations, the studio soon had to close. Later, the company was forced to shut down its other studios as no one wanted to collaborate with them any longer.
- The Strains are demanding that NetEase pay them $900 million in damages. According to Polygon, this is three times the market value of Prytania Media.
- NetEase informed the media that the allegations against it are entirely unfounded. It added that in March, it filed a motion to transfer the case from a Louisiana state court to a U.S. federal court. When it will be considered is unknown.