Nagoshi Studio reportedly facing closure, after NetEase ‘pulls Gang of Dragon funding’

The new studio founded by Yakuza series creator Toshihiro Nagoshi is reportedly facing closure after publisher NetEase indicated that it will pull funding for its debut title.

According to Bloomberg, employees of Nagoshi Studio were told on Friday that NetEase intends to cut off funding for Gang of Dragon, which was announced at The Game Awards just three months ago, this coming May.

NetEase allegedly made the decision after discovering that the project needed an additional ¥7 billion ($44.4 million) in funding to reach completion.

Nagoshi is said to be seeking additional funding to continue developing the project, but has had no success so far. Neither NetEase nor Nagoshi Studio has responded to the claims.

Gang of Dragon was announced in December and said to be “deep into development”. The action game stars prolific South Korean-American actor Ma Dong-seok, best known for his performances in Train to Busan, The Outlaws, and Marvel’s Eternals.

In Nagoshi Studio’s first Western interview in 2023, Nagoshi told VGC that he would not let down fans of his previous games and would ensure they would be happy with his new studio’s debut game.

Nagoshi Studio’s troubles are the latest in a long line of headlines following NetEase’s decision to significantly scale back its international game development operations, following years of investment in new studios around the world.

The move has caused chaos across its international operations, with several studios being forced to close, and others seeking new funding.

In addition to the initial closure of T-Minus, FPC, and Bad Brain, NetEase split from Vancouver-based Worlds Untold, the studio it founded with Mass Effect writer Mac Walters in 2023, as well as Seattle-based Jar of Sparks, the studio founded in 2022 by Xbox veteran Jerry Hook.

Ouka Studio, the Tokyo-based developer behind Square Enix’s Visions of Mana, was also closed in 2024. Other Japanese studios, like Goichi Suda’s Grasshopper Manufacture and Resident Evil producer Hiroyuki Kobayashi’s GPTRACK50, have pushed ahead with release plans without NetEase’s continued support.