NetEase Lured Renowned Developers Only to Abandon Them Shortly After

Long-time Sega producer Toshihiro Nagoshi left the Sonic publisher in 2021 to form a new studio under Chinese gaming giant NetEase. After establishing the Yakuza/Like a Dragon series as one of the best action-RPG sandboxes around, he had the chance to start up a new team to work on a new franchise. Fans have been excited to see what his crew is cooking up. But things might not be going according to plan.

Nagoshi’s next game, an open world action drama that sounds very much in the vein of the beloved Yakuza/Like a Dragon series he pioneered, entered full production last year. A studio of about 80 people were reportedly working on it, and he told Famitsu in the fall that he was currently in the process of trying to decide which content to cut to keep the project on-track, arguing that modern developers keep making their games too big.

Now, however, NetEase is reportedly pulling back from a bunch of gaming investments it made in recent years, including in Japan, where it courted veteran names like Nagoshi as well as Goichi “Suda51” Suda to work on new projects. “NetEase-funded Japanese creators — Nagoshi among them — have been given time to wrap up ongoing projects,” Bloomberg reports. “The message from headquarters in Hangzhou has been that there’ll be no additional funding or time, the people said.”

According to Bloomberg, this strategy shift means that NetEase isn’t planning to spend on marketing or promotion for the games greenlit in Japan, a price tag that can often equate for 30-50 percent or more of a game’s entire production budget. Reading between the lines, the suggestion is that even if Nagoshi’s next game does make it out the door, it won’t get the red carpet rollout fans would hope for, or a new IP might be needed in order to have a chance of standing out in an ever more crowded field.

NetEase acquired Grasshopper Manufacture, the studio behind cult-hits Let It Die and No More Heroes, back in 2021 as well. Director Suda teased a bunch of upcoming games the following year. “I want to do a project focusing on the younger Grasshopper staff, and have them create games in their own new game style,” he said at the time. “First I’d like to start with that…And then see if we can make it to a second and third title. I really want to do it properly and make it work.” Unfortunately, those plans now sound like they could be short-lived.

This new retreat is reportedly part of a pattern of “volatility” at the Chinese gaming publisher. It’s CEO apparently even considered cancelling Marvel Rivals, one of the biggest multiplayer hits in recent memory, over licensing fees with Disney. The team explored using its own characters before ultimately sticking with Captain America and Spider-Man instead.

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