NetEase has acquired Detroit: Become Human maker Quantic Dream

Chinese game publisher and internet firm NetEase has agreed to acquire Quantic Dream, the maker of narrative games such as Detroit: Become Human, Beyond: Two Souls, and Heavy Rain.

The purchase price was not disclosed. The deal is a follow-up to a minority investment that NetEase made in Quantic Dream in 2019.

NetEase Games, a division of NetEase Inc., has acquired Paris-based Quantic Dream, one of the prominent independent video game developers. It specializes in making games where you have to make the right choices under heavy dramatic and emotional pressure — or lose your loved ones.

Quantic Dream, led by David Cage and Guillaume de Fondaumière, will become NetEase Games’ first studio in Europe, representing an important step in fulfilling NetEase’s vision to go global and high end. Quantic Dream has more than 250 people working for it.

I asked why the founders decided to sell. Co-CEO David Cage said in an exclusive email to GamesBeat, “We had acquisition discussions on several occasions during the past 25 years, but as none guaranteed our editorial independence, we decided to pass on these opportunities and continue as an independent studio. Our industry is undergoing a profound mutation through a wave of acquisitions of studios and publishers. For studios, this represents a paradigm shift as our central position in the industry and our contribution to the value chain are now more correctly valued. Consequently, in the recent past, we received several offers meeting our expectations.”

Quantic Dream will continue to operate independently, focusing on creating and publishing its video games on all platforms, as well as supporting and publishing third-party developed titles, while at the same time leveraging NetEase’s significant game development capabilities.

“We are thrilled to embark on an exciting new stage of growth with Quantic Dream, bound by our
shared vision, mutual trust and respect,” said William Ding, CEO and director of NetEase, Inc., in a statement. “NetEase will continue to fulfil our promise to support Quantic Dream to realise its full potential. By combining the wild creativity and exceptional narrative focus of Quantic Dream with NetEase’s powerful facilities, resources and execution capabilities, we believe there are infinite possibilities that could re-define the interactive entertainment experience we provide for players worldwide.”

Quantic Dream is a multi-award-winning studio that was established 25 years ago in Paris. The studio announced at The Game Awards 2021 that it is working in collaboration with Lucasfilm Games on the new action-adventure game, Star Wars: Eclipse.

“Today marks an important milestone for our studio after a quarter century of complete independence,” said Quantic Dream’s founder, CEO and writer-director David Cage, in a statement. “NetEase Games values our creative freedom and the drive and passion of our uniquely diverse team. We will now be able to accelerate the vision we share as a group, of creating landmark titles that touch people on an emotional level. We have highly differentiated games in the making and I truly believe that the best is yet to come from Quantic Dream. I am particularly proud that our employees, who were offered a significant share of our capital over the past years, will fully benefit from this acquisition. It is a testimony to our continued commitment to reward all those who have made Quantic Dream the successful studio it is today.”

Quantic Dream creates games with a strong narrative focus and nonlinear stories that reward players’ choices. The studio, which develops its own proprietary technologies, is also known for its pioneering use of motion capture to bring actors’ performances to life in ways never seen before in video games. Cage and de Fondaumière say these traditions will continue.

“NetEase Games first invested in Quantic Dream three years ago,” said Guillaume de Fondaumière,
co-CEO and Head of Publishing for Quantic Dream. “Over this period, we had the opportunity to work closely together and saw first-hand how like-minded and complementary we are. NetEase Games’ acquisition comes as a natural evolution in this process and creates a unique opportunity to boost Quantic Dream’s growth by giving our production and publishing teams all the necessary means to excel.”

NetEase has made a lot of investments in a wide variety of game companies, but as noted it hasn’t been aggressive about acquiring game companies outright. Fantasy Westward Journey, Marvel Super War, Naraka Bladepoint, Diablo Immortal and The Lord of the Rings: Rise to War.

Regarding the deal, Cage added, “At Quantic Dream, we have been investing for 25 years in our proprietary engine and technologies, as well as in our infrastructure, with our own motion capture, photogrammetry and recording studios, etc. We are also relentlessly investing in our team to remain attractive in a particularly competitive job market. For the coming years, we had the ambition to continue investing in our infrastructure and our games and pursue the creation of quality experiences that can compete with the best studios in the world, while maintaining our independence in both our business strategy and our editorial choices. We also wanted to become producers and publishers of our titles to retain most of the revenues they generate, which is almost impossible if you work for a third-party publisher in the AAA space. Finally, we wanted to support other independent studios by financing and publishing their creations.”

Cage said the company considered going publoic, but the team didn’t want to have to compromise its creations with short-term financial targets. Selling to a large group such as NetEase made thereby a lot of sense. It became a strategic choice to allow the studio to continue to evolve and to have long-term ambitions in a competitive context, Cage said.

As for choosing NetEase, de Fondaumière said in an email to GamesBeat, “NetEase’s proposal made a lot of sense to us precisely because they were already a minority shareholder of Quantic Dream since 2019. We had started to work together; we knew the organization and the people working there and had established a mutual trust and respect. We had the opportunity to witness how like-minded we are, sharing the same vision and ambition for the studio. Their initial financing contributed meaningfully to our investments in our infrastructure, in our publishing division as well as in our internally and externally produced titles.”

He added, “Having NetEase by our side will enable us to pursue our ambitious plans, taking advantage of industrial synergies, while allowing us to remain fully independent in the management of our studio and in our editorial choices. It’s an ideal situation for us, both for the company, its partners and for our team, as well as for the millions of players around the world who follow us and appreciate our work. It is a guarantee for them that Quantic Dream will continue to innovate and take risks to offer creative and innovative experiences. For our employees, it is also a guarantee of sustainability over time, which ensures that we can continue to be ambitious while having the security of belonging to a large global group.”

The founders said that, on their side, they bring their reputation as a triple-A independent game publisher, as well as 25 years of industry and creative expertise. In 2021, despite the pandemic, the company was able to grow its headcount by 50%, de Fondaumière said.

“We have ambitious plans to continue growing our team in the future,” he said. “However, our goal is not to grow for the sake of growing, but rather to attract the best talents needed to realize our games, while maintaining the core values that have always been key to our team: staying a human-sized, diverse, passionate and benevolent team that appreciates self-expression and where all team members can contribute to the games we craft. We don’t want to become a ‘game factory,’ but instead leverage these values that have been central to the success of our studio since it was founded.”

Internally, the company is developing the Star Wars game as well as others. On the third party side, the company just announced at Gamescom that it its publishing Under the Waves from French outfit Parallel
Studio. There are several other projects in development around the world. The company plans to ramp up those third-party projects over time.

“We believe we offer a unique opportunity for fellow developers since we are a developer ourselves and can bring them the creative and industrial support they require: access to our motion capture stage, our recording studio, but also to our very experienced talents,” de Fondaumière said. “Our goal is to help the teams we work with realize the full potential of their games. We are interested in any ambitious and innovative project, regardless of genre, coming from studios daring to be different.”

The company received criticism in its past about the company culture and its approach toward toxicity. Asked if the studio is more diverse now, Cage said, “Our studio is and has been diverse since its first day 25 years ago, a long time before this notion took the importance it finally and rightly has today. People of all genders, ethnicities and origins always played a major role in the history of our studio, women in particular, from our first producer 25 years ago to our production director today. Right now, more than 50% of our managers are women, they are present at all levels and in all departments. They are also more and more present in programming, an area where they were lacking in the past.”

Cage said that LGBTQIA+ employees have also always been present since the early days of the studio, some of them working at the studio for 15 years or more.

“Our policy since day one has always been very clear: anyone who is talented and passionate is welcome in our team,” Cage said. “Quantic Dream has always been diverse by choice, this is part of our DNA, and the values of humanism and tolerance that can be seen in our games are the reflection of the ones we defend in our studio.”

I also asked if the litigation reality to allegations of toxicity and treatment of employees has been resolved.

“The employee and LGBTQIA+ representatives of Quantic Dream have denied multiple times these allegations and we answered all questions pertaining to these at length in the past, through interviews and formal waypoints,” de Fondaumière said. “Our team is exceptionally talented and benevolent, the very reasons why people come and stay working at Quantic Dream for many years. We are really proud of the culture we created over the years and it is a privilege for David and I to be part of this team.”

As to the outcome of that litigation, Cage said, “Listening to employee voices is extremely important, and our industry now paying more attention to the legitimate expectations of everyone to be respected and treated fairly, regardless of their genre, ethnicity, religious belief or sexuality, is of paramount importance.
On our side, we found that we needed to put more efforts to clearly express who we are and what values we defend, so everybody inside and outside of Quantic Dream understands how these must translate to always maintain our benevolent studio culture.”

Asked how this would lead to better games, “Cage said, “A studio like Quantic Dream is all about talent. With talented and committed people, you can create incredible games. Everything we accomplished as a studio since a quarter century is thanks to our team, to all the great talent who have decided to work at our studio and accomplish great things together since three, five, 10 and sometimes 25 years.”

He said that associating the team to the studio life and its successes has always been a central element of management. In addition to royalty sharing, he said the company offered certain long-term employees the opportunity to become shareholders, to then launch in 2019 a free shares plan to all employees with more than one year seniority, until reaching 10% of the capital reserved to the team.

“We are thereby delighted today that this acquisition is also benefitting the team. It rewards their commitment and hard work by our side since years,” Cage said. “For the future, we are also putting in place a profit-sharing mechanism that will allow not only the historical employees to remain financially motivated, but also the newcomers who join us to be equally interested in the future success of the studio.”

I also asked if the studio is better off financially now. de Fondaumière said, “Quantic Dream has been in good financial health for many years now thanks to having released a number of commercially successful titles. While our ongoing projects were already financed, we analyzed carefully the opportunity to strengthen our studio and to accelerate our business plan and decided to join the NetEase group. Their presence by our side will enable us to continue to invest in our team and our studio infrastructure in order to create highly ambitious titles.”

I also asked about the outlook for gaming. The industry is going through an interesting phase right now, with a lot of investments, an accelerated consolidation, the foundation of new studios, Cage said.

“The COVID crisis brought us new organizational challenges, as well as growth in revenues, at a time when many other industries struggled,” Cage said. “I think our industry is not disconnected from the rest of the economy though, and I fear that perhaps more challenging times lay in front of us.”

He said his company would continue to create triple-A titles that are both innovative and ambitious, while pursuing the funding of creative independent titles.

I also asked if the market is good for the type of games that Quantic Dream makes.

“We don’t believe that we make a specific kind of game,” Cage said. “We make games that millions of people around the world play and enjoy. There is a wide panel of game genres and styles available to play, and this diversity is one of the greatest assets of video games. There is a game for everyone, and far from being a problem, we believe that this is what makes this industry so interesting.”

Cage added, “Story driven games will always have a chance to be successful, because everybody loves stories, and interactivity can make any story even more compelling by turning players into the actors of their experience. The successes of Heavy Rain and Detroit: Become Human, which respectively sold in excess of 6 and 7 million units on PlayStation and PC, demonstrate that there is a strong and constant demand for this kind of experience.”

Cage said in closing, “But we don’t want to limit ourselves to any genre, we are fascinated by interactivity in general, so we plan to explore different genres in the future while keeping our DNA and everything we learnt over the past 25 years working on these experiences.”

Originally appeared on: TheSpuzz