Jeff & Annie Strain Sue NetEase for $900mil, Claiming Leaks and False Rumors Were Their Company's Downfall

Last year, Jeff Strain and his wife Annie, owners of Prytania Media, closed four studios - Crop Circle, Possibility Space, Fang & Claw, and Dawon Entertainment. Now, the Strains are suing NetEase, claiming their onetime investment partner in Crop Circle was leaking info and spreading damaging rumors about Prytania’s finances, all leading to the company’s later failure.

The lawsuit documents run 45 pages, and were shared by Polygon. The suit was filed in January and is now in federal court. NetEase owned 25% of Crop Circle Games and the Strains, the other 75%. The Strains allege that NetEase executives spread rumors about the company’s financial situation, hinting at mismanagement or even “fraud and misuse of funds”. That last quote came from another investor who approached the Strains with concerns over those rumors.

Other rumors leaked what the lawsuit calls false and inaccurate info but damage had been done since more spooked investors were  requesting financial disclosure info and ultimately, they lost investors in the process. Ultimately, Prytania  couldn't find more investment, and closed down all of their studios and canceled all their projects.

Annie and Jeff Strain are suing for $900 million in damages for the impact of those rumors which they claim as the primary reason their investors bailed and they were forced to shut down. They also claim that NetEase spread those rumors, in part, due to alleged reluctance to comply with regulations or identify NetEase executives belonging to the Communist Party of China.

NetEase, in its defense, released a statement to Polygon. “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. Our record as a global gaming company speaks for itself,” they said, adding that they are confident “the legal process will vindicate our position”.

Prytania’s employees were laid off, with a number of them claiming they were let go without notice and without severance. Another lawsuit from 2024 saw Omnipresent Group, a company responsible for employee management and human resources services, sued the Strains over failure to pay for services, with a December 2024 update in that case has Omnipresent claiming they not been paid the agreed-upon settlement.