Sega Restructuring, Expecting Massive Losses

Apr 2, 2012 by  

Sega Streamlining

It would appear that after a very tough year for Sega, the legendary company will be streamlining its operations, shutting down productions, and laying off employees.

It has been a tough, tumultuous couple of weeks for video game developers all across the map. Zipper Interactive, the team that brought us SOCOM, MAG, and most recently Unit 13, saw its inevitable closure. Robert Bowling, without any preemptive indicators, parted ways with Activision and Infinity Ward. Even thatgamecompany, coming off the incredibly successful launch of Journey, saw co-founder Kellee Santiago and producer Robin Hunicke leave for greener pastures.

In a letter to investor’s last week, parent company Sega Sammy announced that it would be seeing significant losses for the fiscal year of 2011, totaling in at somewhere around 7.1 billion yen, or $86.5 million USD.

One of the major unfortunate side effects of this loss will be the shutting down of production on many new or less popular properties in favor of dedicating time to “strong IPs, such as ‘Sonic the Hedgehog,’, ‘Football Manager’, ‘Total War’ and ‘Aliens’ which are expected to continue posting solid earnings.

Although the loss of an unknown number of Sega projects is bad news, even worse is the probability that many Sega employees may be looking elsewhere for work very soon. According to the letter Sega Sammy posted:

“We will streamline organization in the U.S. and Europe home video game software. This will create a smaller company positioned for sustained profitability.”

Game sales have decreased drastically all year, and we are saddened to see the unavoidable outcome finally coming to fruition, especially at a company as well known and well established as Sega. The recent output from Sega has not brought with it much fanfare, but hopefully 2012 will bring with it a new wave of quality software from Sonic’s company.

Do you think Sega streamlining their operations might be best for their long term success, or might this be a foreboding event for widespread downsizing in the coming months and years? Let us know in the comments below.

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Source: VG 24/7, Sega Sammy

Tags: PS3, Sega, Wii

9 Comments

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  1. I have a friend who works on the west coast for Sega. Hope his office stays open :(

  2. Nothing new or exciting out of the studio for a very long time. I’m surprised they are still around.

    • Because The Total War games arent exciting and I’m pretty sure the hype around the new Aliens game is pretty big, and Football Manager has a huge fan base. I don’t know what Sega you are talking about but this one still cranks out fantastic games.

      • I dunno I kinda have to agree. I’ve never heard of football manager. Until you mentioned the new alien game, I didn’t know Sega was making it.

        I think right now Sega is having a identity crisis. I asked a fan of sega the other day what big names has sega got going for it? he was able to mention 2 off the top of his head. I mean off the top of my head all I can think of is Sonic.

        I’m not saying they make bad games, just think they don’t advertise enough. Their name isn’t out there enough.

        I hate to see this happen. Sega has been a long time runner in the Game industry, I’d like to see them do better.

        • Just because you didn’t know Sega was making it doesn’t mean you weren’t aware of that new Alien game — that’s the part that matters. And Football Manager is probably much more popular among soccer fans than non-soccer fans (like myself, and maybe you?).

          As for definitive Sega franchises, I can’t really think of any aside from Sonic and the Virtua games. I know they published Renegade Ops, which I’ve been playing lately, and Alpha Protocol, and the Total War franchise, but none of them would really fit into the “definitive Sega” category. Which I guess means you’re right about their name not being out there enough. It’s kind of funny, though, to think that maybe the answer to that would be to implement some sort of super-intrusive, terrible DRM measures, so the internet could get to hatin’ on them the same way we hate on Ubisoft and such. Any publicity is good publicity, they say.

          • Yeah I did know about the Alien game, excited actually, just had no idea Sega had/has any part in it. I’m glad they do, just wish they would get a slogan or something.

            Nah, not much of a soccer fan. Nothing against it, just sits where all sports do, on the side. Never had much interest in sports besides Paintball.

          • I don’t think I can take another Sonic game. It’s like watching a old quarterback from the 70s trying to relive his glory days. It’s cringe-inducing.

  3. had a big console generation and used to be huge in the arcades. What happened?

  4. Bummer. I would’ve hoped they’d done well this year, with Renegade Ops and Sonic Generations.

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