Report: NetEase cutting jobs at Ouka Studios ahead of potential closure

Bloomberg is reporting that Visions of Mana developer Ouka Studios is about to be shuttered by parent company NetEase.

The Japanese studio opened 2020 and hired veteran developers from Capcom and Bandai Namco. It was tapped to handle production on Visions of Mana, a new mainline entry in the popular series published by Square Enix.

The action-RPG garnered a positive reception when it launched earlier this week, but NetEase is reportedly looking to shutter the studio responsible for that critical success.

It's claimed the Chinese conglomerate is reconsidering and scaling back its investments in Japan after struggling to deliver hit titles. Bloomberg states NetEase has laid off "all but a handful" of Ouka developers ahead of a potential closure.

What are NetEase and Tencent planning for Japan?

NetEase rival Tencent–another sprawling Chinese business with a taste for massive investments–is also reportedly rethinking its approach in Japan. The company has seemingly pulled out of several funding commitments in the region that would have financed multiple new projects.

Despite investing heavily in Japanese studios, both NetEase and Tencent are reportedly struggling to overcome creative differences born out of a "cultural mismatch." It's claimed their partner studios in Japan wish to work on smaller-scale, low-risk projects, as opposed to the tentpole franchises coveted by NetEase and Tencent.

People familiar with the situation claim Tencent had been demanding more from prospective partners in Japan when pitching investment deals.

In statements sent to Bloomberg, Tencent said it remains committed to its partner studios in the country. NetEase stated it had "nothing to announce" in relation to the reported layoffs at Ouka.