NetEase Games booth at China Joy conference in Shanghai on July 30, 2021.
Arjun Kharpal | CNBC
Chinese internet giant NetEase opened another gaming studio in Japan as the company continued to expand overseas.
The Hangzhou-headquartered company has hired Toshihiro Nagoshi, formerly Japanese game developer Sega, to run the new Nagoshi Studio in Tokyo, Japan.
The studio “will focus on developing high-quality console titles that will be released globally.”
NetEase is less aggressive in international expansion than the competition Tencent. The latter has sought to go global through acquisitions and investments in smaller game companies. NetEase, meanwhile, has set up studios and holds small stakes in other companies.
Tencent and NetEase have historically both focused on PC and mobile games, which are hugely popular platforms to play in China. Nagoshi Studio’s focus on console titles highlights NetEase’s efforts to attract audiences outside of China, where console games are popular.
According to market research firm Newzoo, console games accounted for nearly 28% of the revenue of the $180.3 billion global gaming market last year. But in China, where consoles were banned for about 14 years until 2014, the market is considerably smaller.
That’s why Chinese game companies like NetEase and Tencent are focusing on console games as part of their international push.
In 2020, NetEase opened Sakura Studio, another gaming venture in Japan with a focus on console games.
In an interview with CNBC last yearHu Zhipeng, vice president of NetEase and one of the top bosses of the tech giant’s video game business, called the console market “quite attractive.”
He also said that he aims for 50% of his game revenue to come from abroad in the future, up from about 10% now.
