Nagoshi Studio, the development team founded by Yakuza franchise creator and Sega veteran Toshihiro Nagoshi, could reportedly be facing closure as publisher NetEase shrinks its gaming investments.
The news arrives just a few months after Nagoshi Studio announced its debut title, Gang of Dragon, which appears to be a spiritual successor to the Yakuza series.
Nagoshi Studio’s funding challenges – quick links
What we know about challenges at Nagoshi Studio
Per a report from Bloomberg, staff at Nagoshi Studio were recently told that NetEase planned to pull essential funding for Gang of Dragon, impacting studio cashflow and its possible future.
Sources alleged that NetEase was unwilling to continue funding the project beyond May, as additional funds of around ¥7 billion (AU$63.4 million) were reportedly required to see the project to completion. After supporting the game to date, NetEase is now reportedly planning its exit.
This follows recent moves by the organisation to reduce its global investments in gaming.
In 2024, NetEase shut down or ceased development at some of its subsidiary companies, including Ouka Studios and Worlds Untold. In 2025, NetEase further shut down Jar of Sparks, T-Minus Zero, Fantastic Pixel Castle and Bad Brain Game Studios. Later, it eased back on partnerships with Jackalyptic Games, Grasshopper Manufacture, and others.
Prior to these divestments, NetEase had invested heavily in game studios around the world, seeking to develop and publish an array of titles in search of the next big gaming hit. While it had significant success with some published games, including Marvel Rivals and Destiny: Rising, it appears the company now aims to consolidate in the long term.
What’s next for Nagoshi Studio’s Gang of Dragon?
At this stage, it’s unclear what happens next for Nagoshi Studio, and whether it will be able to close the reported funding gap left by NetEase’s planned departure. Bloomberg alleges the studio has been seeking interest from other potential investment companies, but without success so far.
When Gang of Dragon was revealed at the 2025 Game Awards, there was plenty of excitement about what was to come, particularly given Toshihiro Nagoshi’s history in game development.
With the Yakuza franchise spinning off in all directions since its debut in 2005, there was hope that Gang of Dragon would be a return to the same gritty, hard-hitting ideas that defined its early adventures, and elevated the Yakuza franchise to global success.
The involvement of actor Ma Dong-seok (Eternals, Train to Busan) also seemed to be a compelling hook, given his talent and how his character was positioned as a hardened veteran and steel-faced anti-hero.
It’s clear there’s support for this game worldwide but given the tight margins behind video game development, and the sudden loss of long-term funding, it’s unclear how Nagoshi Studio will proceed unless another funding partner steps in to save the project.
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