Japanese co-development company Tose shuts down two bases overseas and in Japan to tackle growing scale and complexity of game development projects 

TOSE announced on August 27 that it will be liquidating its subsidiary in The Philippines and shutting down its Development Center in Sapporo, Japan. As a result, the company expects to see an extraordinary loss of 121 million yen (about $840k). TOSE has a long history of doing development work for major game companies like Nintendo and Square Enix, and has developed an undisclosed volume of games (including Scarlet Nexus, the Paper Mario remake, Crisis Core: Final Fantasy VII Reunion and Final Fantasy Pixel Remaster, to name a few). 

As reported by GameBiz, due to game development projects continuously growing in scale and complexity, TOSE decided to shut down bases where it was having trouble improving development efficiency and technology. Instead, the company will refocus its resources on its more profitable bases. 

TOSE PHILIPPINES, TOSE’s subsidiary in The Philippines, was mainly dedicated to the development of projects received from overseas clients. It seems that the subsidiary suffered a drop in efficiency after the COVID19 pandemic and had been operating in the red ever since. TOSE judged that operational and structural improvements would not be enough to get the subsidiary back on its feet, given that its technological capabilities were significantly lagging behind the industry. Thus, the company will be liquidated, resulting in a 105-million-yen extraordinary loss. 

As for TOSE’s Development Center in Sapporo, the company states that it has grown increasingly difficult to acquire talented human resources in the area due to intense competition, making it impossible to execute the company’s plans for expansion and improvement of development efficiency. The center will transfer its operations to another base and shut down, incurring a 16-million-yen loss. 

Last month, TOSE shocked the industry with news of their financial struggle. The company reported a nine-month net loss of 367 million yen (over $2.2 million), which was caused primarily by major clients cancelling games. Against this background, the company announced a recovery plan, which includes a lineup of high-value games as well as improvements to how they work with clients. Perhaps the recent closure of TOSE’s inefficient bases is also part of the company’s recovery strategy.