Nagoshi Studio, the development house founded by Toshihiro Nagoshi, the creator of the Yakuza series, has officially ceased operations. The closure comes after its primary financial backer, NetEase, withdrew its funding.
Japan's official gazette, Kanpo, confirmed the company's dissolution on October 31. NetEase reportedly decided to halt funding in March, citing the escalating costs of the studio's sole project, Gang of Dragon, which was estimated to require an additional 7 billion yen (approximately $44 million) to complete. Nagoshi Studio was unable to secure alternative backing for the game.
Gang of Dragon was unveiled at the 2025 Game Awards, presenting a vision for a gritty, realistic gangster drama set in Tokyo's Kabukicho district, aiming for a more intense portrayal of crime than the Yakuza games themselves.
The closure of Nagoshi Studio is part of a broader trend of consolidation and divestment by Chinese gaming giant NetEase, which has been scaling back its global operations and closing studios since 2024. Notable among these closures was a new MMO studio led by former World of Warcraft designer Greg Street.
Nagoshi Studio was established in 2022 by Nagoshi and a core team from Sega's Ryu Ga Gotoku Studio, the long-time developers of the Yakuza/Like a Dragon franchise. Nagoshi himself had a significant tenure at Sega, spanning over three decades, where he contributed to titles such as Daytona USA, Shenmue, and Super Monkey Ball before creating the Yakuza series.