Creator of Yakuza series Toshihiro Nagoshi in talks to join NetEase, leave SEGA

SEGA developer Toshihiro Nagoshi is in the final stages of negotiating a contract with Chinese rival NetEase Inc.

Nagoshi potentially signing with a new company is the latest update in his changing career trajectory. Earlier this year, Nagoshi stepped down from his position as Chief Creative Officer at SEGA. The move was effective as of April 1.

Nagoshi’s career with SEGA spanned over 30 years with a stunning catalogue of games. He first joined the company in 1989. Since then, he helped create and champion a number of successful titles in SEGA’s library. Three of the most notable games in his portfolio are Monkey Ball, Virtua Fighter and Yakuza.

NetEase Inc. plans to capitalize on Nagoshi’s successful history with hopes that he can help expand the company to an overseas market. Although his official duties are not finalized, Nagoshi is expected to be lead his own development team to create new games.

Impact on other companies

This signing will likely be a larger blow to Tencent Holdings Ltd. than it will be to SEGA, however. Tencent, also based in China, is NetEase’s largest competitor. Due to severe limitations imposed by the Chinese government on the domestic gaming market, both companies have been aggressively competing to secure foreign markets. Signing a recognizable name like Nagoshi to helm game development helps NetEase dramatically in their goals. His status gives the company a competitive advantage over Tencent in both Japanese and Western markets.

On the other hand, this move likely will not impact SEGA as much. Over the past year, SEGA already began restructuring their business in significant ways. These changes include dividing their pachinko slots and games/arcades departments into two separate companies. They also asked 600 employees to retire last November to cut costs in response to COVID-19.

With a deal between Nagoshi and NetEase Inc. getting closer, it seems probable that he will sign. This will likely impact the larger gaming market by giving NetEase a larger foothold in foreign markets. With an already iconic catalogue for SEGA, it will be very interesting to see the work he puts in for a new company.

Via Bloomberg