Nagoshi Studio, the developer led by Toshihiro Nagoshi, officially shut down on October 31, 2026, and the future of its first game, Gang of Dragon, is now in doubt. The studio dissolved following a shareholders’ resolution, according to a notice published November 2 in Kanpo, Japan’s official government gazette.

The closure is a brutal turn for a project that was only recently in the spotlight. Gang of Dragon was announced as part of The Game Awards 2025 last December. The shutdown arrived less than a year after that reveal, and for players who had put the game on their watchlists, it came with almost no warning.

The Money Problem Started Months Earlier

The studio’s downfall did not happen overnight. Earlier this year, a report from March 2026 said NetEase Games planned to cut funding for Gang of Dragon after learning the game needed another ¥7 billion, roughly $44.4 million, to complete development. That single number appears to have set everything else in motion.

Nagoshi Studio was backed by NetEase from the start. Toshihiro Nagoshi founded the studio in 2021 after leaving RGG Studio, and NetEase put money behind the new company and its first project. Once the cost to finish the game became clear, the funding that had kept the team running was no longer guaranteed.

Talks With NetEase Broke Down

Before the studio closed, NetEase reportedly told the team it could carry on independently. There was a catch, though. The studio would have to pay to keep the game’s assets and branding. NetEase was willing to negotiate, but only if Nagoshi Studio could cover those costs on its own.

That condition proved too steep. The studio could not secure any new sponsors, and it could not reach an agreement with NetEase before shutting its doors. The reporting put the outcome plainly:

Unfortunately, Nagoshi Studio couldn’t secure any new sponsors or reach an agreement with NetEase before shutting down.

Without a sponsor or a deal over the assets, a game that needed more money to reach the finish line had no clear path forward. The studio’s dissolution made that gap impossible to ignore.

What Happens to Gang of Dragon Now

The most urgent question for fans is whether Gang of Dragon will ever come out. The game’s Steam page is still up, but it remains unclear what will happen to the title now. Following the studio’s shutdown, it is not clear whether the game will release at all.

That uncertainty is hard for fans to accept. Gang of Dragon was pitched as an action-adventure game inspired by the best Yakuza games. It stars Ma Dong-seok as Shin Ji-seong and drops players into the criminal underworld of Shinjuku’s Kabukicho district in Japan. Those are the ingredients that drew attention, and they are exactly what is now stuck in limbo.

For now, nobody with the authority to decide the game’s fate has publicly committed to a next step in the reporting. The Steam listing staying live keeps the title visible, but visibility is not the same as a release date or a plan.

Who Toshihiro Nagoshi Is and Why This Hurts

Nagoshi is not a newcomer to the industry. At RGG Studio, he created the Like a Dragon series and served as its general director. That series built a devoted following, which is why his decision to start a new studio drew so much interest in the first place.

Leaving a studio that had built a major franchise to launch something new is a big bet. Nagoshi Studio was that bet, backed by NetEase and built around a game meant to carry his name into a new chapter. Its collapse less than a year after the reveal is a sharp reminder of how fragile independent development can be when a single funding decision changes everything.

Don Lee and RGG Studio Move On

The fallout does not end with Gang of Dragon. Don Lee, who stars as Ma Dong-seok in the game, is next set to appear in Hideo Kojima’s PHYSINT. That project also features Bill Skarsgard, Charlee Fraser, and Minami Hamabe. For Lee, the timing is a stark contrast: his lead role in Nagoshi’s first project is now uncertain, while his next big cast credit is already moving forward.

Meanwhile, RGG Studio is preparing to release Stranger Than Heaven, its upcoming action-adventure game, on January 15, 2027. That date offers a reminder of how different the outcomes can be for two studios tied to the same creative lineage. One is heading toward a release. The other has closed, and the game it was built to make has no confirmed future.

The shutdown leaves gamers with more questions than answers. Was the funding gap the only problem, or did the cost of keeping the assets and branding simply become too much for a studio without sponsors? The reporting does not say more than that, and until there is a clear statement about Gang of Dragon, fans will be left watching a Steam page and waiting.