NetEase is reportedly reducing its financial support for Nagoshi Studio, the development house established by Toshihiro Nagoshi, renowned for creating the Yakuza series.

On March 6th, staff members at Nagoshi Studio were informed about the impending shutdown of the studio, with a spokesperson from NetEase announcing that funding will officially end in May.

Nagoshi transitioned from his role at Sega, the publisher of Yakuza, in October 2021 to open his new studio in Tokyo under the banner of NetEase. When this move was initially made public, several colleagues from Nagoshi’s previous team at Ryu Ga Gotoku Studio, including notable director and producer Daisuke Sato, opted to join him.

Recent reports indicate that the studio has struggled to secure new financial backing and is currently negotiating with NetEase to potentially retain the rights and branding of the studio, alongside any projects in development, including their first game titled Gang of Dragon. This game is said to require an additional investment of approximately £33.1 million ($44.4 million) to complete.

This news follows a trend of closures at various western studios backed by NetEase, such as Bad Brain Game Studios, which was formed by ex-Ubisoft developers.