Pangu Game (็ๅคๆธธๆ), a game development studio under NetEase, is said to be merged into tech R&D and gaming department Leihuo (้ท็ซ), according to an anonymous staff member at NetEase who leaked the information in a WeChat conversation (in Chinese).
Pangu is going to be a sub-department at Leihuo, but itโs unconfirmed whether there will be any personnel layoffs, a person close to the matter says, according to local media (in Chinese).
Leihuo is the development force behind some of NetEaseโs most influential self-owned games, which include online game Qiannv Youhun (ๅฉๅฅณๅนฝ้ญ), based on an ancient love tale of a fairy ghost. The game invited celebrity Liu Yifei as a brand representative, but is widely criticized by players for being extremely money consuming.
โI havenโt seen any confirmed information on this. When I was there a few years ago, I heard that Pangu was originally part of Leihuo,โ a former employee at NetEase Games told TechNode. โBut [current NetEase Games staff] Iโve talked to know that Pangu is not doing very well,โ they added. There is no public information of either Pangu or Leihuoโs performance.
The merger rumor was a surprise to many in the industry. On October 29, Pangu just co-established a center for game development with the animation faculty of Chinaโs Central Academy of Fine Arts. Pangu and Leihuo also co-organized a game show for fresh developers at the same event. It is unclear whether it was a sign of an already on-going merger. However, considering tightening state regulation on the general content industry, NetEaseโs decision (if true) is a necessary step to restructure the business and optimize input-output balance.
The company is now hoping to count on gaming, e-commerce, and advertising services to drive future growth. William Ding, Chief Executive Officer and Director of NetEase, commented in August that the companyโs โPC-client and mobile games continue to serve as dual growth enginesโ.
According to the second quarterโs fiscal report of NetEase, online game servicesโ net revenues were RMB 10.1 billion (US$1.5 billion), up 6.7% compared with the second quarter of 2017. NetEase is going to release the 2018 third quarter financial results on November 14.
