Nagoshi Studio is gone. Shareholders voted to dissolve the Tokyo developer on October 31, according to a notice in Kanpo, Japan’s government gazette, which Gematsu spotted first. Gang of Dragon, the crime game Toshihiro Nagoshi revealed at The Game Awards in December 2025, dies with it. The studio never shipped anything.
The easy read, and the one doing the rounds on Reddit, is that a star director left Sega, built himself a vanity shop, burned through money and vanished. I don’t buy it. The timeline points at NetEase.
A studio built for one game
NetEase set up Nagoshi Studio in Shinjuku in November 2021, during a stretch when it was courting famous Japanese developers. Nagoshi wasn’t out pitching investors. NetEase funded the studio itself, and the whole point was to make the game it eventually announced. Building a team in Japan from scratch takes years before production really gets going, and NetEase knew that when it signed up.
Then in March, roughly three months after the Game Awards reveal, Bloomberg reported that NetEase would stop funding the studio and let Nagoshi look for money elsewhere. A publisher doesn’t put a trailer on the biggest stage of the year and pull support a quarter later because it suddenly discovered a problem with the director. Something changed on NetEase’s side, and the obvious candidate is its pullback from game development outside China.
“Allowing” Nagoshi to find independent funding sounds generous. In practice it meant asking a studio with no released game to raise serious money in an industry that has been cutting, not spending. Eight months later the Kanpo notice went up. Nobody stepped in.
Grasshopper got the same treatment
This closure doesn’t stand alone. At the end of September, Suda51’s Grasshopper Manufacture left NetEase and went independent again, only months after Romeo Is A Dead Man launched. Two high-profile Japanese studios that NetEase brought in, both cut loose within about five weeks of each other. That’s a strategy, not bad luck at one shop.
Some fans claim the budget was mismanaged, that Gang of Dragon’s screenshots leaned on AI-generated assets, and that the studio needed tens of millions more to get the game to market. None of that is confirmed by the reporting. Even if parts of it are true, they describe a project NetEase approved, funded and showcased. Watching the budget was NetEase’s job.
Nagoshi isn’t blameless
I’m not letting Nagoshi off entirely. He spent close to five years running a studio that shipped nothing, and a fair number of fans saw Gang of Dragon as a copy of the Yakuza and Judgment games he made at Sega. Plenty of them would have preferred another Judgment. That’s a reasonable complaint about the creative direction.
But creative direction didn’t kill this game. A funding decision did, made by a company that spent years buying into Japanese development and then decided it wanted out. Nagoshi went looking for a replacement backer after the Bloomberg report, and by all appearances found none.
What happens to the Gang of Dragon work, and to the people who built it, isn’t covered in any of the reporting so far.