Ouka Studios, the developer of the Square Enix published action-RPG Visions of Mana, is reportedly set to close as its parent company NetEase has cut “all but a handful of jobs”.
The news comes as part of a report from Bloomberg on Tencent and NetEase, two of China’s biggest game publishers, both of which are scaling back investment in Japanese studios.
Ouka Studios opened in 2020 and hired staff from the likes of Capcom and Bandai Namco, but with the majority of staff laid off, those who remain will oversee the release of the studio’s final games before it shuts.
In a follow-up post on social media, reporter Takashi Mochizuki added that NetEase has been cutting staff at Ouka Studios since at least spring this year.
Visions of Mana released earlier this week, but it would appear the decision to shut the studio is not an immediate reaction to the launch.
According to Bloomberg sources, Tencent has already backed out of several funding commitments for new games as it reconsiders investment in the Japanese games industry.
One such deal was with Bandai Namco to publish the mobile edition of MMORPG Blue Protocol, but earlier this week it announced the game would end service early next year.
Tencent has reportedly been frustrated with Japanese developers, due to a mismatch in ambition. Where the Chinese company is seeking large franchises to take global and has set high expectations, Japanese developers seek to tightly control their franchises. That’s in addition to a shrinking industry post-Covid, resulting in mass layoffs.
In an emailed statement to Bloomberg, Tencent said it remains committed to its partner studios and developing its business in Japan.
NetEase, meanwhile, had “nothing to announce” with regards to the closure of Ouka. “In supporting studios outside China, we craft our strategy based on our goal of providing better gaming experiences to local and global players,” a NetEase spokesperson said. The company is “thus always making necessary adjustments to reflect market conditions.”
Tencent is reportedly working on mobile games based on Elden Ring and Final Fantasy 14, though it also cancelled an unannounced NieR mobile game earlier this year.
