Jeff Strain and Annie Strain, co-founders of ArenaNet and co-creator of State of Decay, are suing NetEase, the creator of Marvel Rivals, for $900 million. Their lawsuit alleges NetEase deliberately devalued and ultimately caused the closure of their studio, Prytania Media Group, by spreading false rumors of fraud to investors.

Filed initially in Louisiana state court and subsequently moved to federal court, the amended complaint accuses NetEase, a Chinese entity, of intentionally undermining the Strains' careers to avoid U.S. legal compliance. The complaint details a complex narrative surrounding Prytania Media's subsidiaries' unexpected closures. NetEase, having invested 25% in Prytania's subsidiary, Crop Circle Games, and placing a representative on the board, initially maintained a positive relationship with the Strains.

However, the relationship soured as NetEase expressed concerns about complying with U.S. foreign investment laws. Emails reveal requests for the Strains to maintain a "low profile" to avoid CFIUS scrutiny and suggestions to establish branches in Canada or Ireland to facilitate investment. The complaint highlights NetEase's alleged ties to the Chinese Communist Party, suggesting a desire to conceal these connections from the U.S. government. This claim cites Tencent's designation as a "Chinese military company" and reports of NetEase CEO Ding Lei allegedly leveraging CCP retaliation threats against Activision Blizzard in 2023. The Strains also allege Lei expressed concerns about his U.S. immigration, tied to a Bel-Air mansion purchase, being jeopardized by publicized NetEase investments.

As the Strains pressed for regulatory compliance, the relationship deteriorated, coinciding with Crop Circle Games' financial difficulties. In February 2024, layoffs and furloughs occurred, marked by internal confusion and anger. The Strains claim that on February 22nd, Jeff Strain received a text alleging Crop Circle Games' fraud, a rumor traced back to NetEase. A subsequent board meeting revealed the rumor's origin.

Following this, investors withdrew funding, leaving Prytania unable to secure new investment. The company, once valued at $344 million, became virtually worthless. Crop Circle Games closed in March 2024. Annie Strain's subsequent letter, blaming the economic downturn and funding issues, omitted mention of NetEase and the fraud allegations. This letter, later removed, also referenced an un-published Kotaku article. Shortly after, another Prytania subsidiary, Possibility Space, closed.

Jeff and Annie Strain, along with Prytania Media, are suing NetEase for defamation, unfair trade practices, tortious interference, and negligence, seeking damages exceeding $900 million—triple the company's previous valuation. NetEase denies the allegations, asserting their commitment to ethical business practices and confidence in legal vindication.