Founders of Possibility Space Sue NetEase for $900 Million Over Defamation Claims
The owners of the defunct gaming studio, Jeff and Annie Strain, allege that NetEase spread damaging rumors, resulting in their studios' closures.
The unexpected shuttering of Possibility Space in 2024 has led to a significant legal action. Jeff and Annie Strain, who co-founded the studio, have initiated a lawsuit against NetEase, seeking $900 million in damages. They allege that NetEase disseminated ‘false and defamatory rumors’ about Crop Circle Games, a studio also owned by them, ostensibly to distract from questions about NetEase’s adherence to U.S. foreign investment laws.
This lawsuit, filed earlier this year, claims that the defamatory actions have led to the collapse of their business empire, which once held a valuation of $344 million. The Strains assert that due to the rumors spread by NetEase, potential investments and partnerships vanished, culminating in the unfortunate closure of several studios, including Crop Circle Games.
In a statement, NetEase has rejected these claims, stating they are ‘wholly without merit’ and pledging a robust defense in court.
In a previous correspondence with employees, Jeff Strain indicated that inquiries from Kotaku’s Ethan Gach about Crop Circle Games had exposed non-public information, leading to decreased confidence from the unnamed publishing partner in continuing to fund their projects.
