NetEase Games will reportedly stop funding Nagoshi Studio in May 2026. This information immediately sparked the attention of many game industry observers, because the studio was led by Toshihiro Nagoshi, a figure widely known through the series Yakuza or Like a Dragon. Nagoshi Studio itself was established in 2021 after Nagoshi left SEGA and started a new chapter under NetEase. This situation is in the spotlight because it not only involves a big name, but also the future of the studio's first project, namely GANG OF DRAGON.
Reason funding was discontinued
According to Gematsu, A source from Bloomberg said this decision was related to NetEase's move to reduce game development activities more broadly. Previously, NetEase was also rumored to have made reductions in a number of other studios. This means that the decision against Nagoshi Studio is not an isolated case, but part of a larger business strategy adjustment.
One of the main factors cited was the need for additional funding to complete the GANG OF DRAGON. The value is not small, at least 7 billion yen or about 44.4 million US dollars. Such a large number indicates that this project may require longer development time, more resources, or adjustments to the scale of production. In the tightening conditions of the gaming industry, publishers will usually be more cautious in allocating funds to projects that still have high risks.
GANG OF DRAGON is canceled?
For Nagoshi Studio, this decision has obviously put a lot of pressure on them. The studio is now said to be looking for sponsors or new sources of funding, but so far nothing has come of it. If that doesn't work out, the future of GANG OF DRAGON can be affected, ranging from delays, changes in development direction, to the more severe possibility of canceling the project altogether.
There are other things that are also important, namely about assets and brands. NetEase reportedly gave Nagoshi Studio the opportunity to run independently. Even so, the studio can only carry the assets and identity of the project if it is able to pay its way out. Conditions like this make the transition process not simple, because the issue is not only about operations, but also about ownership of the results of the development that has been running.
Signaling change in the gaming industry
This case can be read as a signal that the gaming industry is entering a more cautious phase. In recent years, many big companies have been aggressive in funding new studios, including those led by well-known creators. Now the situation is changing. Production costs are rising, the target market is getting more challenging, and publishers are more stringent in calculating the potential returns of each project.
Big names still have value, but they are not always enough to keep a project safe. Publishers will still look at progress, funding needs, and commercial opportunities realistically. This is the situation that Nagoshi Studio seems to be facing right now.
