Nagoshi Studio, developer of Gang of Dragon, has closed after NetEase pulled its funding

Nagoshi Studio, the NetEase-backed developer founded by Yakuza creator Toshihiro Nagoshi, has been closed, months after NetEase stopped funding it, GamesIndustry.biz reports, citing Gematsu.

Japan’s government gazette, Kanpo, published a closure notice on October 31, 2026. According to the report, the notice states that the studio was “officially dissolved by a shareholders’ resolution.”

Nagoshi set up the studio under NetEase Games in 2022. In December 2025, it showed a teaser trailer for its first project, a new IP called Gang of Dragon, at The Game Awards. GamesIndustry.biz’s report does not say what happens to the game now.

NetEase confirmed in March 2026 that it had cut the studio’s funding. It did not give a reason or disclose the terms of the exit. Earlier reports cited by GamesIndustry.biz said NetEase estimated the studio would need at least ¥7 billion (about $44.4 million) more to finish Gang of Dragon. According to those reports, Nagoshi Studio looked for new backers but couldn’t find any. NetEase reportedly told the team it could carry on independently, but that it would have to cover the costs if it wanted to keep the game’s assets or brand.

Nagoshi joined Sega in 1989 and worked for several years in its AM2 arcade division. He was later Sega’s chief creative officer and left the company’s board in 2021. While at Sega, he was a creative director and general director of Ryu Ga Gotoku Studio, the developer of the Like a Dragon series.

Nagoshi Studio isn’t the only Japanese developer to part ways with NetEase recently. In September, Grasshopper Manufacture, the studio behind Romeo is a Dead Man, left the China-based publisher and became independent again. CEO Goichi “Suda51” Suda said the decision followed thorough discussions with NetEase and was made with the publisher’s cooperation.