NetEase has reportedly cut funding for Nagoshi Studio, the studio formed by Yakuza creator Toshihiro Nagoshi.

According to Bloomberg, employees at Nagoshi were informed yesterday, Friday 6th March, of the studio’s pending closure. According to a NetEase spokesperson, it will cease funding the studio in May.

Nagoshi announced his departure from Yakuza publisher Sega in October 2021, when it was first revealed that his new Tokyo-based development house would be joining NetEase.

At the time, the staff page for Nagoshi Studio showed half a dozen other members of his former Ryu Ga Gotoku Studio also quit Sega to join him, including Yakuza director and producer Daisuke Sato.

Bloomberg now reports that the studio has been seeking new sponsorship without success and is in discussions with NetEase about acquiring the rights and branding for the company, as well as any work developed thus far, including Gang of Dragon, its inaugural game, which reportedly requires an additional £33.1 million ($44.4m) to get it over the finish line.

It’s the latest in a line of western studio closures by NetEase, including Bad Brain Game Studios, the company founded by former Ubisoft developers.