Annie and Jeff Strain, owners of Prytania Media, have filed a lawsuit against Chinese gaming company NetEase, seeking $900 million in damages. The lawsuit claims NetEase spread false rumors about financial mismanagement that destroyed their company and led to the closure of multiple game studios.
The legal battle began in January when the Strains filed their case in Louisiana state court. They’re accusing NetEase of defamation, unfair trade practices, and interference with business relations. The lawsuit was later moved to federal court in March at NetEase’s request.
NetEase owned a 25% stake in Crop Circle Games, one of Prytania Media’s subsidiaries, while the Strains owned the remaining 75%. The other affected studios included Possibility Space, Fang & Claw, and Dawon Entertainment—all of which shut down in 2024.
According to Polygon, Strains claimed that NetEase spread rumors suggesting Prytania Media was involved in financial fraud. These rumors allegedly reached potential investors, including Transcend Fund, whose managing director Andrew Sheppard reportedly confirmed the information came from NetEase. As a result, investors backed out of discussions with Prytania’s studios.
The lawsuit suggests that tensions arose between Prytania Media and NetEase over compliance with U.S. regulations. The Strains claim they urged NetEase to follow U.S. laws regarding foreign investment, but NetEase representatives became “increasingly hostile and aggressive” in response. They allege that NetEase resisted transparency—possibly to avoid disclosing ties to the Chinese Communist Party—and retaliated by leaking sensitive financial information and spreading rumors. One key incident cited involves a NetEase representative, Chenglin Han, who reportedly expressed surprise at Crop Circle’s rapid financial decline, a statement the Strains say fueled damaging speculation.
Meanwhile, NetEase has firmly denied the allegations. In a statement to Polygon, the company said: “The allegations by Prytania Media and its founders Annie and Jeff Strain are wholly without merit, and we emphatically deny and will vigorously defend ourselves against them.”
The closure of these studios came as a shock to employees, who were reportedly laid off without notice. When shutting down Possibility Space in April 2024, followed by Crop Circle Games, Annie Strain wrote in a now-deleted website post that “there was not a single organization of any kind willing to invest in continued game development.”
Jeff Strain is known for founding ArenaNet (creators of Guild Wars) in 2000 and Undead Labs (creators of State of Decay) in 2009. Before starting these studios, he worked at Blizzard Entertainment on popular games like StarCraft, Diablo, and World of Warcraft.
The case against NetEase is now proceeding in federal court, with both sides preparing for what could be a lengthy legal battle over the true reasons behind the collapse of the Strains’ gaming empire.
