Core Insights - NetEase is closing multiple overseas studios, indicating a shift from ambitious global gaming aspirations to a more pragmatic approach [1][4] - The closure of Fantastic Pixel Castle, a studio led by a former key designer from World of Warcraft, highlights the challenges faced in the MMO market [2][5] - The MMO sector is experiencing a significant downturn, with major titles failing to meet expectations and the market size reverting to 2015 levels [3][5] Group 1: Studio Closures and Strategic Shift - NetEase has shut down at least four overseas studios in the past year and a half, including Fantastic Pixel Castle, which was established only 18 months ago and has not released any games [1][2] - The decision to terminate investments in projects like Fantastic Pixel Castle stems from a significant gap between project progress and expected returns, prompting a strategic shift towards more viable projects [2][4] Group 2: MMO Market Challenges - The MMO genre is facing structural challenges, with player retention being a persistent issue, as evidenced by the decline in player numbers for even successful titles [5][6] - The traditional MMO model is increasingly misaligned with current player preferences, which favor lighter, more casual gaming experiences [3][5] Group 3: New Strategic Direction - NetEase is transitioning from a broad expansion strategy to a more focused approach, prioritizing projects with higher success probabilities and cutting those with uncertain commercial prospects [4][7] - The company is increasing investments in PC and cross-platform products while also emphasizing competitive gaming genres, moving away from traditional MMOs [7][8]