NetEase halts funding, leading to closure of Toshihiro Nagoshi's newly formed studio
Nagoshi Studio, founded in 2021 by former Sega executive Toshihiro Nagoshi, has shut down following the withdrawal of financial support from Chinese publisher NetEase. The studio was developing a game announced just under a year prior, but without continued funding, operations ceased. The closure highlights the risks tied to external investment in independent development ventures.
Toshihiro Nagoshi’s studio, founded in 2021 after his departure from Sega as chief creative officer and head of Ryu Ga Gotoku Studio, has shut down following NetEase’s withdrawal of financial support. The closure was confirmed via Japan’s official government gazette, Kanpo, which reported the dissolution of Nagoshi Studio. The studio had been developing Gang of Dragon, a spiritual successor to the Yakuza/Like a Dragon series, which was unveiled at The Game Awards in Los Angeles in December 2025. Despite the game’s high-profile reveal, NetEase reportedly ceased funding in early 2026 after the studio requested an additional ¥7 billion ($44.5 million) to complete development—amounts that coincided with NetEase’s broader strategic retreat from game publishing. This move follows earlier reports from Bloomberg and aligns with a larger trend of NetEase scaling back its investment in external studios, including Grasshopper Manufacture and Anchor Point Studios. Nagoshi himself has remained silent since the December 2025 announcement, and his studio’s YouTube channel was temporarily deleted before being restored with all content made private, including the game’s reveal trailer. NetEase has not officially canceled Gang of Dragon, but there is no public indication it intends to take over development.
The situation reflects broader instability in the global game industry, where independent studios remain vulnerable to shifts in investor priorities. Nagoshi Studio’s fate underscores how
The closure of Nagoshi Studio could signal deeper instability in the global game development ecosystem, particularly for creators seeking independence through foreign investment. As studios increasingly depend on large publishers for funding—especially those based in China—this event may serve as a cautionary tale about financial fragility and the risks of over-reliance on single backers. The impact extends beyond the immediate loss of jobs; it may discourage other creative talent from pursuing ambitious, narrative-driven projects without guaranteed long-term support. Comparable cases include the 2018 closure of Double Fine’s “The Cave” project due to shifting publisher priorities, or the collapse of several indie studios after funding cuts from major platforms. These instances reveal recurring patterns where creative vision is sacrificed for fiscal pragmatism. Moving forward, the industry may see a shift toward more diversified funding models—such as crowdfunding or hybrid publishing