Namco Bandai Games will absorb its Namco Tales subsidiary in January next year, Andriasang reports.
According to a release on the company's official website, the studio will be dissolved on January 1 2011 following a final decision by the Namco Bandai board on November 29.
The Namco Tales Studio - known as Wolf Team before Namco bought a majority stake in 2003 - is responsible for the Tales RPG series. In April this year it had 109 employees.
There are several Tales games currently in production, and while Namco Bandai hasn't issued the exact details of its plan, it is believed that the studio will continue to work on the series.
Namco Bandai has reported strong performance recently, doubling its profit forecast last month from ¥194 billion from ¥178 billion.