NetEase cuts off funding to Nagoshi Studio, new Yakuza-inspired game Gang of Dragon in jeopardy along with group's future

NetEase is distancing itself even further from investments, and has decided to pull the plug on funding for yet another studio that it helped create.

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Japanese game dev group Nagoshi Studio will soon lose its funding from NetEase, putting its new game Gang of Dragon--and the future of the group itself--in jeopardy. Sources tell Bloomberg that NetEase's money tap will stop flowing to Nagoshi Studio starting in May. It's said that the studio is now facing impending closure.

NetEase's decision to stop financing Nagoshi Studio came after it was found that the team's debut game, Gang of Dragon, would require around $44 million in additional funding to complete. NetEase has given Nagoshi Studio permission to continue on its own without funding, however, the creatives would have to essentially buy back Gang of Dragon's IP and/or publishing rights (a similar situation kept Remedy from making an Alan Wake sequel until many years later, when they bought back the rights from Microsoft).

Nagoshi Studio is currently seeking additional funding from external partners in a bid to release Gang of Dragon and continue operations.

In 2022, NetEase established Nagoshi Studio as a wholly-owned subsidiary, with the goal of famed Yakuza series creator Toshinori Nagoshi establishing a new franchised IP for the entertainment company. NetEase has earned its place in the industry through billion-dollar live games, and the investments in new teams like Nagoshi Studio were meant to help get NetEase get a foothold on the more traditional AAA market.

Since its AAA studio spree years ago, NetEase has shut down a number of key groups that it started, many of which went without releasing their first game. Jar of Sparks, which was created by gaming veteran Jerry Hook, was shut down in 2025, as was T-Minus Zero Entertainment, a studio started by former BioWare producer Rich Vogel.