NetEase Inc is in final negotiations with Yakuza and Super Monkey Ball Creator Toshihiro Nagoshi to poach him away from Sega, according to a new report from Bloomberg. This is part of the Chinese company’s attempt to expand its own country’s borders amid the government-led crackdowns. The Yakuza franchise is developed by RGG Studio, which was founded by Nagoshi. He has been with Sega for 32 years.
If this deal does succeed this will be the biggest acquisition in the rivalry between NetEase and their rival company Tencent Holding, to acquire video game talent and assets in Japan. This is made more urgent from slowing growth and regulatory pressure in the Chinese market.
Though the deal is not finalized yet, the expectation is that Nagoshi is expected to set up his own company under the deal. He will then begin developing new games under this banner. His role within the deal has also yet to be finalized, and he has requested not to be identified as the ongoing deals are privately hammered out.
Both NetEase and Tencent have been on a buying tear recently, attempting to fill out their libraries with many of Japan’s most sought-after developers, animators, and creators betting on their franchisees having a global appeal. While outside investing has been met with skepticism in the past, in the wake of the global pandemic, as well as Sony pulling much support for small games, they have seen this as an opportunity to move in.
Tencent, the world’s largest publisher, has seen japan as the potential anchor to a global media juggernaut on par with that of Disney. According to sources at Bloomberg, the company is on the bring of another acquisition to their large roster of recent purchases.
China has one of the largest markets in the world for profit, but Chinese companies have struggled to create their own global franchise. They have recently taken an interest in investing in animes, as they have mass appeal across Asia and the U.S. This strategy intensified after the Chinese government began combating gaming addiction against minors, which forced both compies to dial back in-game purchases and total playtime for children.
Tokyo-based industry analyst Serkan Toto of Kantan Games stated:
Tencent and NetEase have been speaking to just about all publicly traded studios here and are actively courting some privately held developers, too. They both feel pressure to make headway in Japan, especially since game regulations in their home market are becoming increasingly restrictive.
Tencent Games recently released Pokemon Unite, a game created by in-house studio TiMi, and they are currently on the hunt for funding for games similar to another Chinese developed game Genshin Impact, which was extremely successful. According to reports, the Tencent and Nintendo collab is also gaining traction.
Tencent strategy chief James Mitchell stated during an earnings call that:
The fact that we are for the first time successfully penetrating the Nintendo Switch opportunity, for the first time moving into the Japanese market, gives us a degree of confidence we’re moving in the right direction for games.
Between both rivaling companies, they have managed to strike 20 deals within the Japanese market. These have been for smaller studios, focusing on them over major companies like Square Enix. They have also made moves into the U.S.market as well, and also purchased minority stakes in a large number of studios.
The attempt to sway Toshihiro Nagoshi to NetEase will most likely see him take a similar role to what he already has now. We will need to wait and see if this deal will go through.