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Sega drops jobs, cancels games as losses mount

Sega drops jobs, cancels games as losses mount

Sega is looking to concentrate on core IP and digital distribution in order to stem its growing losses.

Sega has confirmed that it is to cut jobs and cease development on non-core titles as it looks to deal with a drop in income of almost 50 per cent for the financial year.

The company has confirmed that it is undergo a restructuring exercise which will see considerable job losses in Europe and the US, although it isn't quantifying exactly how many positions are at risk.

As a further part of its attempts to stem its losses, the company has declared non-core IP a casualty. Instead of developing new games, Sega will be concentrating on driving its established properties including Sonic the Hedgehog, Total War, Football Manager and the Aliens franchise.

Finally, the company is looking to get out of the retail business in favour of creating downloadable titles for sale on services like Xbox Live Arcade, PlayStation Store, the Nintendo eStore and Valve's Steam platform. As a result, you can expect to see significantly fewer Sega games on shop shelves in the near future.

'This realignment of the business around existing and digital IP is a necessity to ensure that Sega continues to invest and enhance its digital business offering, whilst reducing its reliance on traditional packaged goods,' a company spokesperson explained in a statement to press.

'As a result of the Sega Sammy Board decision to consolidate the business, many of our internal functions will be re-structured and this could result in a number of redundancies within the publishing business across the Western organisation. The company will be entering into a re-structure phase to reflect the unprecedented change in our industry and to move the company forward appropriately.

'The changes will position Sega as a content led organisation, maximising sales with a strong and balanced IP portfolio across both packaged and digital distribution. The management team are confident that the proposed restructure will benefit the company and make it fit for purpose within the changing nature of the industry over the coming years.
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The news comes as Sega reports a drop in profits from a projected ¥38 billion to just ¥20 billion (around £286 million to £151 million) for the completed financial year. The restructuring exercise, coupled with penalties for cancellation of titles currently in development, is estimated to be costing the company around ¥7.1 billion (around £53 million.)

16 Comments

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B1GBUD 2nd April 2012, 13:34 Quote
I can't see Sega making much from their old IP, they need something new and fresh. What ever happened to creativity?
SpAceman 2nd April 2012, 13:53 Quote
They are in some sort of trouble. They should be looking for new ways to make money.
SaNdCrAwLeR 2nd April 2012, 16:41 Quote
they should make an Alpha Protocol 2... or a propper remake...
srsly that game was awesome and had a lot of great potential were it not for the bugs that were simply there due to release pressure by SEGA...
DwarfKiller 2nd April 2012, 18:37 Quote
It's a shame but I'd rather see them cutback and scrape by for now rather than risk it all and die off.
digitaldunc 2nd April 2012, 18:50 Quote
I lament the days of the early 90s when Sega was a gaming behemoth.

I don't feel they command the same respect any more. A bit like ID, in a way.
Thedarkrage 2nd April 2012, 18:51 Quote
I just hope Creative Assembly will be ok.
SexyHyde 2nd April 2012, 22:02 Quote
in these revolutionary times, evolving is futile. i loved them when i was younger but i wouldn't miss them if they were to go, tbh i quite like these big firms going as its just making it easier for the good little firms that have had it hard for far to long.
longweight 2nd April 2012, 22:08 Quote
Quote:
Originally Posted by digitaldunc
I lament the days of the early 90s when Sega was a gaming behemoth.

I don't feel they command the same respect any more. A bit like ID, in a way.

There is no reason to respect them anymore sadly.
SexyHyde 3rd April 2012, 00:41 Quote
they lost my respect with the saturn (which i still own and love to this day) they ignored their fans / customers demands for a sonic game on the platform and only brought out some tosh game in the final days of the console. then their best game on the saturn (NiGHTS) didn't get an outing on dreamcast despite huge demand. they made some absolutely great games but some quite frankly retarded business decisions. Sonic was cool back in the day but there hasnt been a game to bring it back big on any console past the megadrive, unlike nintendo/mario with mario64/mario kart which really impacted on the mainstream.
DrTiCool 3rd April 2012, 14:17 Quote
I had a blast with Jet Grind Radio on DC, that was Sega, creative and innovative, then as said above some simply bad business decisions. Remember Shenmue? that game cost Sega $80mil as far as I can remember
V3ctor 3rd April 2012, 14:22 Quote
They haven't done anything good for years (maybe Bayonetta, wich i never played), I'm surprised they're still here... And I like SEGA, I own a Dreamcast, a Genesis, and a Master System II, but they just don't bring anything new, they've been dying slowly since the Dreamcast died... They can't even make a proper Sonic game anymore...
I hope they reorganize, and make use of their heads with new IP, the old IP is worn to the bone
Aracos 3rd April 2012, 15:10 Quote
Quote:
Originally Posted by Thedarkrage
I just hope Creative Assembly will be ok.

With the recent studio expansions creating an entire second floor for a console team I hope they don't feel the burden of the cuts, I don't want to see them fail.
TreeDude 3rd April 2012, 18:10 Quote
Playing through Sonic Generations now. It certainly is the best full 3D Sonic game to come out since SA2.

They need to finish Shenmue and release it bundled with ports of the first 2 games. That and a sequel to SoA.
Fizzban 3rd April 2012, 18:24 Quote
Games have moved on from the old Arcades of the 80's n early 90's, but Sega has not. Sadly other than the occasional decent game they haven't really done anything well since the Megadrive days.
thil 5th April 2012, 17:48 Quote
Quote:
Originally Posted by B1GBUD
I can't see Sega making much from their old IP, they need something new and fresh. What ever happened to creativity?

It scares the shareholders. It's risky. By it's very nature, it's new, and therefore unproven,.
Fizzban 5th April 2012, 23:19 Quote
Quote:
Originally Posted by thil
It scares the shareholders. It's risky. By it's very nature, it's new, and therefore unproven,.

Basically this. There is too much Corporation in games these days. They stifle the new as it is an unknown element. Sadly these days games need Corporations.

I pray for the happy medium.

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Still waiting..
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