Nagoshi Studio Shut Down: Gang of Dragon's Fate Explained

By GameDrop Staff · Nov 02, 2026 · Industry · 4 min read

Ma Dong-seok character in Gang of Dragon in front of a Kabukicho sign — Image: Nagoshi Studio / NetEase Games

Nagoshi Studio, the Tokyo developer founded by Yakuza creator Toshihiro Nagoshi, has been formally dissolved before releasing a single game. A notice in Japan's official gazette, Kanpo, published on November 2, 2026 confirms that shareholders voted to dissolve the company on October 31. Its debut project, Gang of Dragon, now has no known developer.

Dissolved: October 31, 2026, by shareholders' resolution
Confirmed by: Kanpo (Japan's government gazette), extra issue No. 240, published November 2
Backer: NetEase Games, which announced it would stop funding the studio from May 2026
Funding gap: about 7 billion yen (roughly $44 million) more needed, per Bloomberg
Gang of Dragon: no cancellation statement yet, but no studio left to make it

What does the Kanpo notice say about Nagoshi Studio?

The dissolution notice names Minoru Morinaga as representative liquidator, according to KeenGamer's reading of the gazette, and gives no reason for the decision. Creditors have two months from the day after publication to file claims, and claims filed after that window are excluded from the liquidation. In plain terms, the company is now being wound up, not merely paused. Gematsu spotted the notice first, and Polygon, GameSpot, GamesRadar and Anime News Network have all reported it.

Why did NetEase stop funding Nagoshi Studio?

The warning signs date back to March. Bloomberg reported on March 7, 2026 that a NetEase spokesperson confirmed the company would stop financing the studio from May, as NetEase scaled back its game development investments. A person familiar with the matter told Bloomberg that NetEase reached its decision after concluding Gang of Dragon would need at least 7 billion yen, about $44 million, more to finish. Tech in Asia's summary of the report adds that the studio was looking for new sponsors and negotiating asset rights, while NetEase said the studio would have to fund itself to keep the assets and the brand.

Since then, GamesRadar notes, the studio's YouTube channel and website were taken down and series director Daisuke Sato changed his Twitter bio to "ex-Nagoshi Studio". Polygon reports Nagoshi Studio apparently never found another backer for the game.

What was Gang of Dragon?

Gang of Dragon was revealed at The Game Awards in December 2025 as a cinematic action-adventure set in Tokyo's Kabukicho district, the same nightlife area that inspired Yakuza's Kamurocho. The lead role was played by Korean actor Ma Dong-seok (Don Lee), and the trailer promised a story of clashing gangs, with melee, gunplay and car action according to Taiwanese outlet 4Gamers. It was announced for PC, and its Steam page was still live with a "coming soon" label at the time of the dissolution notice, per 4Gamers.

Is Gang of Dragon officially cancelled?

Not in so many words. Neither NetEase nor Toshihiro Nagoshi has issued a cancellation statement that we could find. Wccftech calls it "safe to assume" the game is cancelled, and GameSpot's headline says it "won't be any game at all", but those are reporters' conclusions. The fair reading: the studio that was making the game no longer exists, and NetEase said in March that the studio would have to fund itself to keep the assets and brand. Any new publisher would have to rebuild a team around the project, which looks unlikely on short notice.

Who is Toshihiro Nagoshi, and why does this matter?

Nagoshi led Sega's Ryu Ga Gotoku Studio and is widely credited as the father of the Yakuza (Like a Dragon) series. He left Sega in 2021 and founded Nagoshi Studio under NetEase, announced on January 24, 2022 as a wholly owned Tokyo subsidiary focused on high-end console games. For fans of Yakuza-style crime dramas, Gang of Dragon was the most notable new entry in years, which is why the news has travelled so widely. 4Gamers adds, citing company registry data, that Nagoshi and Sato left the board when their terms ended on March 31, a sign the team had already dispersed.

Is NetEase pulling back from Japan?

NetEase has closed or shrunk several overseas studios. In August 2024, PocketGamer.biz reported that NetEase planned to close Ouka Studios, the team behind Visions of Mana, a day after that game launched, and described a rethink of how Chinese publishers operate in Japan. Nagoshi Studio is another entry on that list. For other recent studio shake-ups, see our reports on EA shutting down BioWare and the Xbox Q1 FY27 earnings.

What other studios are in trouble this week?

Warp Pipes' November 2 digest also flags Raw Power Games, the Danish studio behind Chronicles: Medieval, which said on Steam that it lost funding and is "at real risk of closing". The medieval battle game was planned for early access in early 2027. The studio is asking players to keep it wishlisted while it looks for help.

What should Yakuza fans play instead?

If you were waiting for Gang of Dragon, Sega's own Like a Dragon and Judgment games remain the closest alternatives, and our upcoming games calendar tracks new releases as they are confirmed. Check free games and deals for cheap ways to catch up on older entries.

Frequently asked questions

Is Nagoshi Studio shut down?

Yes. A Kanpo gazette notice published on November 2, 2026 says shareholders dissolved the company on October 31, 2026.

Is Gang of Dragon cancelled?

There is no official cancellation statement, but the studio making it has been dissolved and NetEase stopped funding it from May 2026, so the game has no known developer.

Why did NetEase stop funding Nagoshi Studio?

Bloomberg reported in March that NetEase concluded Gang of Dragon needed about 7 billion yen (around $44 million) more to finish, and was scaling back game investments.