Bandai Namco Holdings ADR (OTC:NCBDY) is facing internal shifts in its Japanese workforce following recent reports of project cancellations.

Despite a strong release from its latest anime-based game, Dragon Ball Z: Sparking! Zero, which sold over 3 million units within 24 hours, Bandai Namco Studios is reportedly cutting down on staff indirectly and halting multiple projects due to declining demand.

Workforce Struggles And Voluntary Exits

According to Bloomberg, around 200 of Bandai Namco Studios' approximately 1,300 Japanese employees have been placed in a controversial employment situation since April.

Workers are allegedly being reassigned to so-called "oidashi beya," or "chasing-out rooms," where they have no tasks, pushing them to resign voluntarily. As of this report, nearly 100 staff members have quit under this pressure.

While Bandai Namco denies the practice, stating that there are no such rooms designated to encourage voluntary exits, the company acknowledges periods where employees may experience delays in being reassigned to new projects.

A Bandai Namco representative said: "Our decisions to discontinue games are based on comprehensive assessments of the situation. Some employees may need to wait a certain amount of time before they are assigned their next project, but we do move forward with assignments as new projects emerge."

Project Cancellations And Financial Woes

This workforce shift coincides with Bandai Namco's decision to overhaul its game development pipeline. The company reported 21 billion yen in writedowns (approximately $140 million) over the three quarters leading to December.

Notable projects that have been scrapped or delayed include several anime-based games, such as titles tied to Naruto and One Piece, as well as the Japan-only MMORPG Blue Protocol, which was canceled just before its global release under Amazon Games' banner.

Additionally, the mobile game Tales of the Rays was shut down in Japan in July, following similar trends of halted projects.

There are even rumors that project, commission by Nintendo ADR (OTC:NTDOY), has been paused. No official details have surfaced regarding the delay.

While these internal challenges loom, Dragon Ball Z: Sparking! Zero has emerged as a bright spot for the company. The game saw rapid success. Some 3 million units were sold in its first day of release and a peak concurrent player count of over 122,000 on Steam alone. PlayStation 5 and Xbox Series X/S versions also contributed to the overwhelming response.

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