NetEase told staff at Nagoshi Studio it will pull funding for the Tokyo developer's debut title Gang of Dragon in May, after determining the action game needs an additional ¥7 billion ($44.4 million) to reach completion.

Employees learned of the decision on Friday, March 6, according to Bloomberg. The publisher named May as the cutoff for further financial support. Neither NetEase nor Nagoshi Studio has publicly commented on the report.

Nagoshi Studio was founded by Yakuza series creator Toshihiro Nagoshi. The studio announced Gang of Dragon at The Game Awards in December 2025, less than three months before the funding news surfaced.

What does the decision change for the studio?

Nagoshi is now seeking alternative financing to keep the project alive. He has landed no replacement investor so far. The 2025 announcement described Gang of Dragon as "deep into development," with prolific South Korean-American actor Ma Dong-seok attached for a starring role.

Ma Dong-seok is best known for Train to Busan, The Outlaws, and Marvel's Eternals. A wind-down would cost the Tokyo studio its first-party team and strand a project already in advanced production.

Why is NetEase cutting the budget now?

The ¥7 billion ($44.4 million) shortfall is the headline number driving the decision. That figure implies Gang of Dragon ran well past its original production envelope before NetEase reviewed the books.

NetEase has spent two years unwinding an international studio portfolio built during the 2021-2023 investment surge. Closures and pauses since 2024 include:

• T-Minus, FPC, Bad Brain (already shut down)
• Worlds Untold (Vancouver, founded in 2023 with Mass Effect writer Mac Walters — now paused)
• Jar of Sparks (Seattle, founded in 2022 by Xbox veteran Jerry Hook — now seeking new funding)
• Ouka Studio (Tokyo, developer of Square Enix's Visions of Mana — closed in 2024)

Two Japanese studios — Grasshopper Manufacture (Goichi Suda) and GPTRACK50 (Resident Evil producer Hiroyuki Kobayashi) — have pushed ahead with release plans independent of NetEase support.

What did Nagoshi say about his new venture?

In his first Western interview with VGC in 2023, Nagoshi said he would not let down fans of his previous work. He said he would ensure those players would be happy with his new studio's debut game.

That 2023 framing now sits uneasily against the March 2026 funding cliff. Nagoshi Studio has not issued a public statement since Bloomberg's report.

What does this mean for studios weighing publisher deals?

NetEase's retrenchment signals a broader retreat from Western and Japanese external development. The publisher is consolidating around its internal Chinese operations and a tighter first-party release slate.

For studios weighing offers from Chinese publishers, the Gang of Dragon decision sharpens the risk calculus. Funding commitments tied to NetEase now carry clearer terminal clauses and shorter review windows.

What to watch before May

Closure of the Tokyo studio would leave Gang of Dragon in limbo, halt development, and put the project's IP status in flux. Industry observers will track:

• NetEase's Q1 2026 earnings call for confirmation of remaining international commitments
• Any statement from Nagoshi Studio on alternative publishers or buyers
• Status updates for Tokyo-resident staff and contract obligations

The next 60 days will determine whether Gang of Dragon ships as billed or ends as another unfulfilled proposition from a publisher ending its external ambitions.