Yakuza creator loses studio after NetEase pulls out
Nagoshi Studio — the team Toshihiro Nagoshi assembled after leaving Sega — has been liquidated. The record of the company's dissolution appeared in "Kampo," Japan's official government gazette; this is the legal conclusion of a story that has been reported since March. The publisher ended funding for the project.
The studio was funded by NetEase. According to Bloomberg, it withdrew development support back in March after the team needed an additional ¥7 billion (about $44.5 million) to carry the game through to release; this coincided with NetEase's general retreat from the gaming sector. Formally, Gang of Dragon has not been cancelled, but it is unclear whether the publisher has any desire to see the project through to the finish.
From The Game Awards stage to an entry in the government gazette
Less than a year passed between the premiere and the dissolution. In December, at The Game Awards in Los Angeles, the studio showed Gang of Dragon — a spiritual successor to the Like a Dragon / Yakuza series that Nagoshi created at Sega.
Nagoshi himself left Sega in 2021, where he held the post of creative director and headed Ryu Ga Gotoku Studio. That same year he founded Nagoshi Studio under NetEase's wing — and it took four years to show the game for the first time. He made no public statements after the December announcement.
Signs of trouble appeared over the summer. Nagoshi Studio's YouTube channel was first deleted, then restored, but all the videos — including Gang of Dragon's debut trailer — were switched to private.
Studios are leaving NetEase one after another
Nagoshi Studio is not an isolated case. Goichi Suda's Grasshopper Manufacture and Anchor Point Studios have already separated from NetEase, and the list of teams under the holding company that have endured layoffs or closure is noticeably longer.
The takeaway for developers is simple: an auteur's reputation does not protect a project when an investor reviews its portfolio. The "big-name veteran plus outside money" scheme works until the first budget review, and a request for additional funding in the middle of production is exactly that kind of trigger. For the Nagoshi Studio team this means looking for new work, and for the market it means the appearance of specialists with experience on major Japanese action titles.
Why this is happening right now
The Nagoshi Studio story looks like a symptom of a broader process. Against the backdrop of major holding companies cooling on expensive single-player projects, outside funding for auteur studios is ceasing to be reliable: a publisher that handed out contracts on a wave of growth shuts down entire divisions rather than individual projects when its strategy changes. The wave of teams parting ways with NetEase fits the same logic.
If the trend continues, industry veterans leaving corporations for their own studios will have to plan for shorter production cycles and interim releases: a project that needs several years before its first public showing is too vulnerable to a shift in the investor's strategy. Interest in arrangements with several funding sources instead of one exclusive partner will probably grow as well.
Gang of Dragon's fate remains open. There was no formal cancellation, and in theory the project could be handed to another team. But the style and direction here are tied to specific people who are no longer united by a single company.
Community reaction
The reaction to the official closure of Nagoshi Studio on October 31 is mostly sad: people feel for the team and believe that the debut Gang of Dragon, which looked like a spiritual successor to Yakuza, will never come out. There is less anger at NetEase alone than there is fatigue: many point out that the money was cut back in the spring, no new publisher was found, and a famous name turned out not to be enough to carry the game to release. Opinions on blame diverge. Some write that the studio fell under NetEase's general retreat from foreign console investments rather than a personal reckoning. Others blame Toshihiro Nagoshi himself: the project aimed at too large a budget from the start, and the extra tens of millions could not be raised. Irony sounds separately: not everyone is ready to criticize NetEase while the company still has popular games.
"The studio of Toshihiro Nagoshi, the father of Yakuza, closed on October 31 without releasing a single game. NetEase pulled the money for Gang of Dragon. Even a name like that is no guarantee today that a game will make it to release."
— @Robugin (X)
"In reality it wasn't about Nagoshi, but about NetEase's change of course. They were going to enter the console market and retreated last year. Nagoshi Studio got caught in that rollback. He was brought in precisely for the game he was making."
— @SMartworkz0 (X)
"It's his own fault. He went straight for a huge project and blew almost all the money on girls and nonsense. This isn't made up. He should have made a more modest game first and only then saved up for a big hit."
— @Martyrdomer (X)
What do you attribute the closure of Nagoshi Studio to — management's miscalculations, NetEase's budget cuts, too expensive an ambition for Gang of Dragon?