Toshihiro Nagoshi, the creator of the acclaimed Yakuza series, is facing a potential setback with his next game. Reports indicate that publisher NetEase is implementing significant budget cuts across its development studios, including Nagoshi Studio.

Nagoshi's departure from Sega and Ryu Ga Gotoku Studio in October 2021 marked a significant shift in his career. Following the release of his final title with the developer, Lost Judgment, a spin-off of the Yakuza series, he founded Nagoshi Studio.  While details remain scarce, the studio's inaugural project is envisioned as a large-scale game.

However, this ambitious project may now be forced to scale back due to financial constraints.  Bloomberg reports that NetEase founder William Ding is prioritizing profitability and focusing on established, successful titles like the mobile and Switch game, Eggy Party.  This shift in strategy has reportedly led to job losses at other NetEase studios, including the complete closure of the Seattle-based team behind Marvel Rivals.

Sources suggest that Nagoshi Studio will be allowed to complete its current project, but further funding or development time is unlikely.  Concerningly, the budget reportedly lacks provisions for marketing and promotion, raising questions about the game's release and potential reach.

While NetEase has been expanding its presence in the gaming industry for years, the recent focus on highly profitable, established games like Eggy Party represents a strategic shift.  This casual game, released in 2022 for Nintendo Switch and mobile platforms, has achieved significant success, particularly in China.  According to the report, Ding is now primarily interested in investments projected to generate hundreds of millions of dollars annually, a benchmark Nagoshi's game is unlikely to meet.

In contrast, the Yakuza franchise has thrived since Nagoshi's departure.  Ryu Ga Gotoku Studio has launched four titles, including Like a Dragon: Ishin! and Like a Dragon Gaiden: The Man Who Erased His Name. The latest entry, Like a Dragon: Infinite Wealth, was announced earlier this year.