State of Decay co-creator Jeff Strain and his wife, Annie Strain, have filed a substantial $900 million lawsuit against NetEase Games. The lawsuit accuses the publisher of Marvel Rivals of defamation and unfair trade practices, claiming NetEase's actions significantly harmed the Strains' game publishing company, Prytania Media.

The conflict originated in 2024 when Kotaku journalist Ethan Gach contacted Jeff Strain regarding the closure of Prytania Media subsidiary Crop Circle Games.  During their communication, Gach revealed non-public information about Project Vonnegut, a game under development at Possibility Space, another Prytania subsidiary. Strain contends these leaks triggered a decline in investor confidence, ultimately preventing Crop Circle Games from securing necessary funding and leading to its closure.

The Strains' lawsuit, filed in January 2025, alleges that NetEase, a 25% stakeholder in Prytania Media and an investor in Crop Circle Games, disseminated damaging rumors within the gaming industry, eroding investor trust in Crop Circle Games.  Furthermore, the lawsuit claims the relationship with NetEase deteriorated when the Strains sought assurances of NetEase's compliance with US foreign investment laws.  

The lawsuit also claims Activision Blizzard executives felt threatened during licensing negotiations with NetEase in 2023.  NetEase has vehemently denied all allegations, asserting the claims are "wholly without merit" and promising a vigorous defense. NetEase maintains its reputation as a global gaming company speaks for itself and expresses confidence the legal process will reveal the true reasons behind Prytania Media's difficulties.

This legal battle coincides with increased public scrutiny of NetEase's recent business decisions.  Last month, NetEase laid off key Marvel Rivals developers, including the game's director, as part of aggressive cost-cutting measures in response to financial underperformance in Q4 FY2025.  Other NetEase-owned studios have since faced budget cuts, operational halts, and layoffs, with some facing potential closure.  NetEase is reportedly attempting to sell several studios to other publishers to improve its financial position, but the Strains' lawsuit could significantly complicate these efforts.