Annie and Jeff Strain, founders of Prytania Media, are suing NetEase. They claim that the actions of the Chinese company led to the closure of their subsidiary studios first, and subsequently Prytania Media itself.
- First, let us remind you that Prytania Media included game development studios Crop Circle Games, Possibility Space, Dawon Entertainment, and Fang & Claw. All of them closed in 2024.
- In the announcement about the closure of Crop Circle Games, it was stated that the studio ceased to exist due to financial problems amid a lack of interest from gamers in its unreleased debut game. In the closure of Possibility Space, Jeff Strain blamed the media, where information about the studio’s first title leaked, after which a potential publisher pulled out of the partnership.
- In January 2025, the founders of Prytania Media suddenly blamed NetEase for the closure of the studios and filed a lawsuit against them.
- In the lawsuit, the Strains pointed out that NetEase was an investor in Crop Circle Games, holding a 20% stake in the studio. They claimed that shortly after NetEase invested in the developers, a letter was received from a top manager of the Chinese company, Han Chenglin. He requested not to publicize the funding to avoid NetEase appearing on the radar 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 remarks.
- According to the Strains, at one point, the founder of the Transcend fund contacted them, stating that Han accused Crop Circle Games of fraud and embezzlement of funds. Allegedly, the studio management was transferring capital to other Prytania Media subsidiaries and falsifying financial reports.
- Amidst these rumors, some investors decided to stop working with Crop Circle Games. Although Prytania Media denied the allegations, the studio had to be closed shortly thereafter. Later, the company was forced to disband its other studios, as no one wanted to collaborate with them anymore.
- The Strains demand that NetEase pay them $900 million in compensation. According to Polygon, this amount is three times the market value of Prytania Media.
- NetEase informed the media that the accusations against it are completely unfounded. It added that in March, a request was filed to transfer the case from the Louisiana state court to a U.S. federal court. When it will be considered is unknown.