Nagoshi Studio searching for new investors after NetEase decision

NetEase reportedly halts funding for Nagoshi Studio

A major shakeup has hit the game industry as NetEase has reportedly decided to suspend financial support for Nagoshi Studio, the team led by legendary game creator Toshihiro Nagoshi.

According to reports, employees at the studio were informed of the decision recently, with the funding cut expected to take effect starting in May. The move was confirmed to media outlets by a NetEase spokesperson.

Part of a wider restructuring strategy

The decision appears to be part of a broader strategic shift within NetEase under CEO William Ding. The company has been restructuring its global gaming operations and scaling back investments in certain international projects.

This move follows earlier reports that NetEase shut down Ouka Studio in late 2024 as part of the same cost reduction initiative.

While Nagoshi Studio was initially expected to continue developing its first project, the broader budget tightening appears to have eventually affected the studio as well.

Gang of Dragon project faces uncertainty

One of the key factors behind the funding decision reportedly involves the studio’s upcoming project, Gang of Dragon.

The game’s development reportedly requires an additional 7 billion yen, roughly 1.53 billion USD, to reach completion. The size of the required investment has reportedly raised concerns within NetEase about the financial risk of continuing the project under current market conditions.

Because of these concerns, the company ultimately chose to halt funding for the studio.

Studio searching for new investors

Following the funding suspension, Toshihiro Nagoshi is reportedly working to secure a new partner or investor who could help continue the development of the studio’s projects.

However, progress appears limited so far. Reports indicate that negotiations are ongoing between Nagoshi Studio and NetEase regarding intellectual property rights and development assets already created.

NetEase has reportedly stated that if the studio wants to continue using the existing game materials or brand elements, it may need to purchase the rights from the company.

A reflection of industry pressures

The situation highlights the fragile nature of independent studios operating under large international publishers.

Even though the global gaming industry continues to generate enormous revenue and has surpassed the film industry in scale, studios still face major risks when relying on external investors.

For Nagoshi Studio, the coming months could determine whether the team can find new financial backing and complete its first major project, or whether one of Japan’s most anticipated new studios could face closure before releasing its debut title.

Origin: Bloomberg