Nagoshi Studio Loses NetEase Funding, Faces Potential Shutdown

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NetEase has decided to halt funding for Gang of Dragon, the first game from Nagoshi Studio, which could potentially lead to the premature closure of the studio.
Toshihiro Nagoshi, the creator of the Yakuza series, requested an additional $44.4 million to complete Gang of Dragons development, but NetEase is unwilling to invest further in the project.
Nagoshi Studio is now seeking alternative funding sources to salvage Gang of Dragon, but finding such funds may be challenging due to the risk-averse climate in the AAA games market.
NetEases decision to stop funding and potentially close studios, including Nagoshi Studio, is part of a broader reversal of their international expansion plans, with previous closures including Ouka Studio and Fantastic Pixel Castle.

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Nagoshi Studio, founded by the creator of the Yakuza series, may be forced to cancel its first game and cease operations prematurely following NetEase’s decision to halt funding for Gang of Dragon. According to a Bloomberg report, Nagoshi Studio employees were informed that NetEase intends to discontinue funding for the project, which was revealed at The Game Awards in December 2025. Toshihiro Nagoshi, who was brought over from Sega to establish one of NetEase’s leading international studios, reportedly requested an additional ¥7 billion ($44.4 million) to complete Gang of Dragon’s development. However, NetEase is unwilling to invest further in the project. As of now, neither party has officially commented on the situation. Gang of Dragon, which has been in development since 2022, is an action game starring South Korean-American actor Ma Dong-seok, known for his roles in Train to Busan, The Outlaws, and Marvel’s Eternals. The initial trailer, unveiled in December 2025, showcased a mafia-themed game reminiscent of the Yakuza series—a genre for which Nagoshi is known.

If NetEase withdraws from the project, Nagoshi Studio will attempt to secure funding from other sources to salvage Gang of Dragon. This will be challenging due to the risk-averse climate in the AAA games market, where numerous publishers have canceled projects and shut down studios in recent years. NetEase plans to stop funding Nagoshi Studio starting in May 2026 because of escalating development costs and the substantial capital required to finalize Gang of Dragon. After funding ends, the studio plans to seek alternative funding sources to continue the game’s development. NetEase will allow them to continue working on Gang of Dragon, but the studio will be responsible for covering its costs. If the studio can afford to do so, NetEase is open to discussing transferring the license—but only with proper compensation. This decision is part of a broader reversal of NetEase’s international expansion plans. Beginning as early as 2024 with the closure of Ouka Studio, the Japanese developer of Visions of Mana for Square Enix, NetEase continued this trend in November 2025, when it shut down Fantastic Pixel Castle and Bad Brain Games.

Uncertain Future for Nagoshi Studio and Gang of Dragons after NetEase Decision and Studio Closures

Moreover, NetEase closed three studios, including an American developer group working on Marvel Rivals in collaboration with its Chinese studios, two months after the successful launch of Marvel Rivals, which had reached over 40 million players. Other Japanese studios, such as Goichi Suda’s Grasshopper Manufacture and Hiroyuki Kobayashi’s Gptrack50—the producer of the Resident Evil series—have continued with their release plans independently of NetEase’s support. Nagoshi Studio’s future, and that of Gang of Dragon, is now uncertain as it explores alternative funding options following NetEase’s decision.

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