NetEase Games, the studio behind Marvel Rivals, is being sued by State of Decay co-creator Jeff Strain and his wife, Annie Strain, both of whom own publisher Prytania Media, for the princely sum of $900 million.
The lawsuit alleges that NetEase's defamation and unfair trade practices led to the demise of Prytania and its subsidiaries, including Crop Circle Games – which NetEase owned approximately 25% of.
As reported by Polygon, the couple filed a lawsuit in January before NetEase pushed for the case to be moved to federal court earlier this month. A letter from Steven Griffith Jr., who is representing Prytania Media and the Strains in court, sent to NetEase CEO Ding Lei, outlines their claims against the Marvel Rivals developer. In it, Griffith alleges that NetEase "spread false and defamatory statements that caused the demise of Prytania Media."
The lawsuit, according to Griffith, sees the Strains seeking $900 million in damages – triple a previous $300 valuation of the company. He also claims that NetEase, particularly employee Han, circulated "defamatory rumors" that implied Prytania Media had committed financial fraud. As alleged by the couple, NetEase is to blame for any problems they encountered – and also didn't comply with United States Department of the Treasury regulations.
"I can share details in our next call, but the high level message is we want to keep away from the radar of [the Committee on Foreign Investment in the United States] which can be quite tricky," Griffith attributes to a NetEase representative in his letter. "Geopolitical stuff is already causing trouble to our business efforts in North America." The Strains allegedly tried to ensure that NetEase was compliant with U.S. law with its Crop Circle Games investment.
However, NetEase representatives "became increasingly hostile and aggressive," according to the couple. The Strains state that NetEase "dodged confirming its compliance" with U.S. law because it'd have to "identify owners and board members that are Members of the [Chinese Communist Party] and their position within the CCP, as well as the existence of its CCP party organizations, it [sic] members, and the control it exerts over NetEase."
In response, NetEase tells Polygon that the Strains' allegations "are wholly without merit." The company is prepared to "vigorously defend ourselves against them," too. "Our record as a global gaming company speaks for itself, and we remain committed to conducting business with integrity. We are confident that the legal process will vindicate our position and shed light on the real reasons behind the demise of the Strains' studios."
