Bloomberg has reported that the Visions of Mana developer Ouka Studio will be shut down by NetEase and Tencent.
Ouka Studio was the team behind the Trials of Mana remake that released back in 2020, and worked with Square-Enix to release the latest entry in the series Visions of Mana. Now, after only having been out for a day, the studio faces closure with "key staff" remaining onboard to finalize things behind the scenes.
As the report also mentions, Tencent was going to handle the mobile version of Bandai Namco's Blue Protocol as well, which also was shut down earlier this week.
For more information, here is part of the original article by as reported by Takashi Mochizuki:
Tencent Holdings Ltd. and NetEase Inc. are reconsidering or scaling back many of their investments in Japanese studios, after years of spending yielded few hit games and the Chinese market staged a comeback.
NetEase has cut all but a handful of jobs at its Ouka studio in Tokyo, according to people familiar with the matter. It intends to shut the Shibuya outfit, which had opened with much fanfare in 2020 and gone on to hire veterans from big names such as Capcom Co. and Bandai Namco Holdings Inc. The few that remain will oversee the rollout of its final games, before the studio winds down.
NetEase’s far larger rival, Tencent, is also reconsidering the pace and scale of investments in the country, the people said, asking not to be named as the details aren’t public. It’s already backed off from at least several funding commitments for new games, the people said.
The previously unreported moves to cut back staff and spending in Japan follow years of investment in the world’s No. 3 gaming market, with not much to show for it. China’s two dominant game publishers sought to escape a stagnating home market by making a series of bets in Japan since 2020, looking to incubate the next great entertainment hits to bring back home.
In one of the more prominent deals, Tencent in 2023 secured the rights to develop and publish the mobile edition of Bandai’s Blue Protocol, which it hoped to build into a franchise. But this week, its Japanese partner said it will end support for the game in 2025.
Shenzhen-based Tencent, the world’s biggest games distributor, has been frustrated by its interactions with Japanese developers, in part because of a mismatch in ambition between the Chinese firm and local partners, the people said. Local creators are adept at smaller-scale, lower-risk projects, whereas Tencent went to Japan in search of tentpole franchises to take global, one of the people said. Since late last year, Tencent has been setting higher goals and expectations when offering money to studios, according to the people.
“We may be approaching a point where Tencent and NetEase begin to scrutinize their returns more closely,” Bernstein analyst Robin Zhu said. “Globally, the video gaming industry has retrenched post-Covid, and many large publishers have reduced headcount or scaled back investments. Anecdotally, the Japanese developers’ desire to tightly control what can be done with their IP has sometimes been a source of friction.”
Both Tencent and NetEase continue to work closely with Japan’s biggest names, such as Capcom and Bandai Namco, and neither is planning a full-scale retreat from the country, Zhu added. Gaming hits can be notoriously difficult to predict and require a long-term commitment to development, a common issue for the entertainment industry.
Tencent said in an emailed statement that it remains committed to its partner studios and developing its business in Japan. NetEase said it had “nothing to announce” when asked about a potential closure of Ouka, and that it was seeing progress at the many Japanese studios it’s invested in.
“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.”
Still, Ouka encapsulates the way many of their initial plans didn’t quite pan out.
Hangzhou-based NetEase recruited seasoned creators from Japanese publishers like Capcom, Bandai Namco and Square Enix Holdings Co. in 2020 when it set up the console-focused team. The studio was held up as a key operator in NetEase’s push to develop more high-profile hits, helping infuse them with Japanese creative flair. Tencent, similarly, saw Japan’s wealth of anime, comics and gaming content — already popular in China — as attractive territory to mine.
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