Sega Goes Through Further Restructuring

In what appears to be the only news we ever report on Sega, the company has announced continuing poor financials.  The European and American divisions of the company will se restructuring thanks to an expected loss for the year in excess of $86 million.  The company says they plan to remain profitable, but the lowered profits will hurt.  As such the company is cancelling many titles already in development and will instead focus on IP that are a safer bet including properties like Sonic and Aliens.  The press release had a few comments I thought you’d find interesting.

The Sega consumer business is expected to post operating loss due to the challenging economic climate and significant changes in the home video game software market environment in the US and Europe.

It is essential to streamline [our] organisation in the field of home video game software, while shifting to a structure that corresponds to a change in environment, including strengthening development in the field of digital content.

We decided to narrow down sales titles to strong IPs such as Sonic the Hedgehog, Football Manager, Total War and Aliens which are expected to continue posting solid earnings. In accordance with this, we are cancelling the development of some game software titles.

This is really sad news for an old-school Sega fan like myself.  Sega used to be one of the most daring and creative developers out there, and now it’s just sad to see how far they’ve gone.

5 thoughts on “Sega Goes Through Further Restructuring”

  1. The question is, what can Sega actually do at this point? They could diversify their content into the mobile space where there are less upfront development costs and try to turn more profits there but it seems like they’re not going to go anywhere but down in the home console software market to be honest.

  2. Yeah there’s nothing they can do at this point really. Besides relying on what sells, i.e. Sonic, Aliens, etc. their options are extremely limited. The Sega of old is completely gone now, and one day all of Sega may be gone. It’s sad that one of the most creative companies out here couldn’t get their act together years ago.

  3. It a sad day for Sega. If it keeps up like this, we’re eventually going to see them severely downsizing. I won’t be surprised to see them axing everything except for the Sonic series when it comes to actual game development, focusing on Sammy’s side of the business in Japan. Ironic to see Sega turning into a niche publisher bit by bit. While they’re going to stop taking risks on publishing certain titles and making deals with other developers (particularly PlatinumGames’ series), I’m fearing the worst when it comes to their internally-developed games and series. Valkyria and Yakuza are probably big no-nos by now. In this state, it pains me to stay that I hope that the layoffs include their Japanese game development division from the teams which made Valkyria and Yakuza possible. That way, I can see spiritual successors to these game series outside of Japan from newly-formed studios. I know it’s greedy of me, but since they’re only focusing on four series they might as well axe the internal studios behind Yakuza and Valkyria. And when it comes to being practical, the only studio which matters now is Sonic Team. The rest can work on HD re-releaes of their old classics on download platforms, which they should keep doing since it’s money making and not that expensive to develop. While they’re at it, they can sell off their niche franchises to other developers/publishers to keep them afloat, like Valkyria, Shenmue and NIGHTs.

    As long as Sonic is popular and around, Sega will be at least present in some capacity…but it can get to a point when they can no longer even develop their new Sonic games, instead outsourcing it to other popular developers. Try to wrap your head around that bleak future.

  4. Yeah It’s really sad Ahmed, but this was coming for a very long time. Ever since they left the hardware business they have been slowly but surely rolling their way to irrelevance. It’s incredible too because they have so many incredible arcade franchises under their belt. What a crying shame this is.

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