Developer Level-5 was first founded back in 1998 in Japan before expanding to the West with Level-5 International America. This has led to the localization of many games from series like Yo-Kai Watch, Professor Layton, and Ni No Kuni, even though most of them had other companies handling the publishing themselves. While Level-5 is still working on games, it sounds like they are condensing their overall resources with the closure of a few of their studios.
According to a report from gamesindustry.biz, Level-5 has all but shut down their North American operations at Level-5 International America, along with their spin-off studio Level-5 Abby. Both studios supposedly laid off the majority of their staff in the middle of last year as part of winding down their operations. They say that there are no specific numbers for how many were laid off at each studio, but about 10 employees were laid off back in August 2019 at each of them.
On top of people losing their jobs, also very troublesome news is that a source told them that this may mean no more Level-5 games outside of Japan. Even with them utilizing other publishers like Nintendo and Bandai Namco in the past, perhaps they are changing their strategies. It was quite surprising that we still never got a Western release for Yo-Kai Watch 4 that released for the Nintendo Switch in June 2019, followed by a PS4 release in December 2019. However, no further news of a localization has come besides a statement last year stating one was coming. With this new news though, it would seem that may not be as likely anymore.
Level-5 has produced some very quality games over the years from the Ni no Kuni games to the Professor Layton series, so we really hope this isn’t it for Western releases of their titles. One has to wonder if putting all their eggs in the Yo-Kai Watch basket to become the next Pokemon hurt them in the long run, but we really have no way to know how much of an impact that made.