Chinese conglomerate NetEase Games has reportedly laid off most employees at their Tokyo-based subsidiary, Ouka Studios, which recently completed Visions of Mana under contract for Square Enix, and is planning to shut down the studio entirely.
This information comes from a Bloomberg report about Tencent and NetEase, two of China’s largest game publishers, both of which are reportedly reducing their investments in Japanese studios. In response, a NetEase Games representative told Bloomberg via email that there is “nothing to announce” regarding the possible closure of Ouka Studios and that progress is being made at the many Japanese studios in which they have investments.
Ouka Studios, which opened in 2020 and hired talent from companies like Capcom and Bandai Namco, has laid off most of its staff. The remaining employees will oversee the release of the studio’s final games before its closure.
In 2022, Ouka Studios had announced three projects in development: an action RPG featuring unique allies, a new-style battle game based on a popular series, and an original cooperative action game with gigantic enemies.
In a follow-up post on social media, reporter Takashi Mochizuki mentioned that NetEase has been reducing staff at Ouka Studios since at least the spring of this year.
Visions of Mana was released just a few days ago, but it seems the decision to close the studio isn’t a direct response to a poor launch. Instead, it appears to have been a gradual decision over time. With the studio having now released its final projects, the decision-makers can shut it down without hesitation.
According to Bloomberg, NetEase Games’ competitor, Tencent, is also re-evaluating the scale and speed of its investments in Japan, having already pulled back from several funding agreements for new projects.
One such deal was with Bandai Namco to publish the mobile version of the MMORPG Blue Protocol, the irony of which being the fact that Bandai Namco announced that the game would end service early next year, coinciding with a commitment to DEI game design.
Tencent also expresses support for DEI (Diversity, Equity, and Inclusion) initiatives focusing on diversity, inclusivity, and representation in game design.
Reportedly, Tencent has been frustrated with Japanese developers due to a “mismatch in ambition.” While Tencent is looking to create large, globally successful franchises, with the word global obviously meaning to align with BlackRock’s ESG initiatives that promote progressive social agendas and incorporate censorship of problematic content, Japanese developers prefer to maintain freedom and control over their franchises.
It’s purely coincidental that games like inZOI by KRAFTON are removing male and female sex terminology and adding nonbinary options, given that Tencent holds a substantial 13.87% stake in KRAFTON.
A spokesperson for NetEase commented, “When supporting studios outside of China, we develop our strategies with the aim of providing better gaming experiences for both local and global players.” They added that the company is “constantly making necessary adjustments to align with market conditions.”
These “market conditions” have led to significant failures for Western game studios, as well as Japanese corporations like Bandai Namco, SEGA, Sony, and Square Enix, all of which have chosen to push Western ESG and DEI agendas in their products, ultimately resulting in poor financial performance.
NetEase Games also owns Nagoshi Studio, led by Toshihiro Nagoshi, former COO of SEGA and creator of the Yakuza franchise. Additionally NetEase owns Grasshopper Manufacture, headed by Goichi “Suda 51” Suda; and GPTRACK50, led by Hiroyuki Kobayashi, a veteran of Capcom for 27 years having worked as a producer for various titles such as Dino Crisis 2, Devil May Cry, the resounding remake of the original Resident Evil and the Sengoku Basara franchise.
These studios may potentially face closures in the coming years as China’s domestic game development industry seems to be hitting its stride. This is evidenced by the overwhelming success of Black Myth: Wukong, the country’s first large-scale single-player game, which sold over ten million copies in just three days, with majority of its player base coming from China.
The timing of this news is quite unexpected, given that Visions of Mana was just released, and within 24 hours, Ouka are now a skeleton crew. Despite these circumstances, the game has received strong reviews and positive feedback from both journalists and players, achieving a “Very Positive” rating on Steam, with 86% positive reviews from a total of 267 reviews.
“Visions of Mana,” the first mainline entry in the Mana series in almost 18 years, was released on August 29th, attracting a respectable 4,500 concurrent players on PC which is quite decent for a Japanese RPG. Despite its apparent success that’ll likely generate revenue for Square Enix, its developers Ouka Studio are being phased out by its Chinese owners due to no fault of their own.
