The transformation of NetEase: Starting from three MMO games entering the same martial arts track

NetEase's three-year-developed martial arts MMO game "Where Winds Meet" has officially announced its release date as July 26.

Friends who have followed NetEase's game products in recent years may have noticed a strange phenomenon:

"Justice Mobile," launched in June 2023, reportedly had a development cost of approximately 800 million yuan according to Zinc Finance;

"The Legend of the Condor Heroes," launched in March 2024, was officially promoted as having a six-year development cycle with an investment of 1 billion yuan;

Then there's "Where Winds Meet," scheduled for release this July. While its development cost has not been disclosed, it was specifically mentioned by NetEase CEO Ding Lei during the Q4 and full-year 2023 earnings release, stating that "the company attaches great importance to it," suggesting its development cost is likely comparable to the previous two titles.

Within a year, three games with development costs exceeding hundreds of millions are all crammed into the martial arts sub-genre of MMOs. The irrationality is immediately apparent:

First, the allocation is unreasonable. During the 2023 earnings call, Ding Lei mentioned two games alongside the already successful "Justice Mobile" and "Eggy Party": "The Legend of the Condor Heroes" and "Where Winds Meet." Now, these two highly anticipated future products are both being thrown into the same MMO sub-genre, competing with "Justice Mobile" for market share?

Second, the strategy is illogical. "Justice Mobile" was released in late June last year, less than a year ago, and still has a long lifecycle ahead. Yet, during its peak revenue period, NetEase is launching two more heavily invested games of the same genre to split its market.

Wouldn't it be more reasonable to allocate these resources to other game genres? Or perhaps delay "Where Winds Meet" by a year, allowing "Justice Mobile" or "The Legend of the Condor Heroes" to stabilize before introducing the next title?

Behind this counterintuitive approach lies a major shift in NetEase's strategic thinking for its gaming division.

MMOs: NetEase's Future Direction

From a macro perspective, here's a key takeaway: After comprehensively evaluating AI's potential and NetEase's own AI technological advantages, the company will increasingly focus on the MMO genre—more specifically, the "MMO + open-world" sub-genre.

NetEase's previous strength in MMOs was "standing head and shoulders above the crowd." In the future, it aims to be "the only game in town."

To understand why, we need to examine the application of AI technology in gaming.

Currently, the industry recognizes two main paths for integrating AIGC with gaming:First, applying it to production processes—enhancing content creation and reducing costs across 文案， art, programming, and operations. Second, enhancing user experience by leveraging AI to deliver novel interactions.

For both paths, "MMO + open-world" games represent the ideal scenario for AIGC implementation.

On the production side, open-world games differ from those that rely on 创意 and 玩法. They demand painstaking effort—the more content provided, the more immersive the world becomes.

While massive content alone doesn’t guarantee a quality open-world game,a quality open-world game absolutely requires massive content.

Today’s advancing AIGC can already replace manual labor for many less creative tasks in open-world development. With AIGC, the 周期 and 成本 of producing open-world epics have significantly decreased.

On the user experience side, players crave open-world games where, as described in many online novels, NPCs have their own stories, preferences, and behavioral logic, and player actions genuinely impact the world. In essence, this translates toAI driving the game world’s organic evolution through massive computation.

Thus, open-world is AI’s best gaming application, while MMOs offer longer-term, higher-revenue models compared to single-player purchases.

NetEase, as China’s earliest AI-focused gaming company, established the Fuxi Lab and NetEase Interactive Entertainment AI Lab in 2017 to research AI’s gaming applications. Subsequent annual reports consistently highlight AI investments.

According to NetEase, its proprietary AI now streamlines the entire game 工业化流程， improving key 环节 efficiency by 90%.

For users, NetEase’s AI-driven features—like NPC interactions in "Justice," AI voice customization in "World Beyond," and viral appliances in "LifeAfter"—have dominated 热搜。

While not yet matching the freedom of online novels, these innovations deliver 惊喜体验 with technical 门槛， showcasing NetEase’s AI edge.

Given AI open-world’s potential and NetEase’s dual expertise in AI and MMOs, its 2024 flagship titles being MMOs signals a strategic future direction.

MMO Revolution: NetEase’s Market Grab

Why then cram 武侠 MMO releases so closely? Short-term strategy explains this.

"Justice Mobile" was among 2023’s most successful launches. But its greater value lies inredefining traditional MMO paradigms.

Traditional MMOs rely on 数值追逐 to retain hardcore spenders, monetizing via 少数 high-ARPU players—a model that dominated 手游-era free-to-play MMOs.

Now, this approach is obsolete. As GameLook reported, even in Korea—home of "Legend" and "Lineage"—the MMO market shrank by a third from2021-2023, with analysts declaring "Korean markets are abandoning MMO expectations."

"Justice Mobile" counters this by lowering MMO 门槛 to attract masses, then monetizing via 薄利多销. DataEye shows its launch reduced rival 武侠 MMO 日活 by up to 30%.

This new model is 掠夺传统 MMO markets. NetEase’s 2024 MMOs, even non-武侠 titles like "Seven Days World," pledge "no pay-to-win" and "reduced grind."

NetEase’s recent MMO 挑衅 campaigns 加速曝光 this model shift, positioning it as a 变革者 claiming 红利。

红利 comes twofold:

1. 玩家认知红利: After "Justice Mobile," rapid releases of player-friendly MMOs cement NetEase as the "Genshin of MMOs" in 玩家心智。

2. 武侠 MMO 垄断: With three distinct 武侠 MMOs (traditional combat, gacha heroes, hardcore action), NetEase 全方位覆盖 this culturally vital genre—half of China’s MMO market.

NetEase’s Longevity Challenge

Long-term, this strategy reflects NetEase addressing its Achilles’ heel:strong originality, weak operations.

Titles like "Harry Potter: Magic Awakened" (23 亿首月流水， then player exodus), "Onmyoji," and "Identity V" showcase NetEase’s 创意 but struggle maintaining 长期 mass appeal without Tencent’s 社交 or ByteDance’s distribution.

"Justice Mobile" proves MMOs can achieve 全民 status without 竞技 elements. Three 武侠 MMOs mark an 运营 pivot—with "Justice" already successful and "Condor Heroes"争议， July’s "Where Winds Meet" will test NetEase’s ability to sustain this momentum.