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Nagoshi Studio, the game developer founded by Toshihiro Nagoshi, the creator of Sega’s Yakuza series, has officially been dissolved in Japan. The company’s closure was recorded on 31 October following a shareholders’ resolution, according to a notice in Japan’s official government gazette, Kanpo.
The shutdown brings an abrupt end to the studio’s five-year run and leaves the future of its debut game, GANG OF DRAGON, uncertain. The action title was unveiled at The Game Awards in December 2025, but its development had come under pressure after publisher NetEase decided to withdraw funding.
Official dissolution confirms the studio’s closure
Nagoshi Studio was established in Tokyo in November 2021, shortly after Nagoshi left Sega, where he had spent more than three decades and led the team behind the Yakuza and Like a Dragon franchises. The studio was backed by NetEase Games as part of the Chinese publisher’s push to build a portfolio of development teams outside its home market.
The company’s dissolution was reported by Japanese government gazette Kanpo and subsequently detailed by gaming publications including Gematsu and Video Games Chronicle. The notice establishes that the company was formally dissolved on 31 October. It is more definitive than the earlier signs of trouble, which included the disappearance of the studio’s website and changes to its online presence.
NetEase funding withdrawal put GANG OF DRAGON at risk
The financial problems became public in March 2026, when Bloomberg reported that NetEase planned to stop funding Nagoshi Studio in May as part of a broader reduction in its game-development investments. The publisher confirmed the funding decision to Bloomberg, according to contemporaneous reporting by Gematsu.
Reports at the time said the studio needed at least ¥7 billion—approximately $44 million at the time—to complete its first game. Nagoshi Studio was reportedly exploring outside investment and the possibility of becoming independent. NetEase was said to be open to a separation, but the studio would need to meet financial conditions to retain its assets and intellectual property.
No replacement funding deal was publicly confirmed before the company’s dissolution. The closure therefore appears to have ended the studio’s attempt to continue independently, although the precise financial arrangements and disposition of its assets have not been publicly detailed.
What happens to GANG OF DRAGON?
GANG OF DRAGON was introduced at The Game Awards 2025 with a cinematic trailer set in Tokyo’s Kabukicho entertainment district. The game starred South Korean actor Ma Dong-seok, also known internationally as Don Lee, as Shin Ji-seong, a powerful figure navigating the district’s criminal underworld.
The reveal attracted attention because it marked Nagoshi’s first major project after leaving Sega. Its setting and crime drama premise recalled elements of the Yakuza series, while the trailer suggested a more grounded, cinematic approach to action and storytelling.
However, the studio’s closure does not, by itself, establish the legal status of the game or prove that every possibility of a future release has been ruled out. NetEase has not publicly confirmed that another developer will take over the project, and no new publisher or financing arrangement has been announced. The game’s development status and the ownership of its existing materials remain unclear.
Another sign of NetEase’s retreat from overseas studios
Nagoshi Studio’s closure is part of a wider pullback by NetEase from investments in overseas game developers. The company had spent several years funding studios led by established industry figures, seeking to build new intellectual properties and expand its international development network.
Other projects and studios have also been affected by funding changes. Worlds Untold, founded by former BioWare writer Mac Walters, and Jar of Sparks, founded by former Xbox executive Jerry Hook, previously faced the loss of NetEase support. The outcomes have varied: some teams have explored new backing or independence, while others have been unable to continue as originally planned.
The broader shift highlights the risks of building a studio around a single major publisher. Even a high-profile creative team with a recognised founder can face an existential challenge when its principal source of financing is withdrawn before its first game reaches the market.
What remains unresolved
Neither Nagoshi nor the studio has publicly explained the final circumstances of the closure in detail. Key questions remain about the fate of GANG OF DRAGON, the rights to its name and assets, and whether members of the development team will regroup elsewhere.
For now, the confirmed development is the formal dissolution of Nagoshi Studio on 31 October. The project that was meant to introduce Nagoshi’s next chapter after Yakuza is left without a publicly announced path to completion. Any claim that the game has been definitively cancelled or transferred to another studio would go beyond the information currently available.
Follow more industry developments in Spire News’ Gaming coverage.
Sources
- Gematsu: Nagoshi Studio shuts down
- Video Games Chronicle: Nagoshi Studio officially closes after NetEase cuts funding
- Game Developer: Nagoshi Studio shuts down after NetEase funding cuts
- Gematsu: NetEase Games to stop funding Nagoshi Studio in May
Updated: 3 November 2026. The status of GANG OF DRAGON remains unconfirmed following the studio’s dissolution.
