Sega Canceling Games, Cutting Jobs

by Jeff Cork on Mar 30, 2012 at 03:44 AM

Sega is blaming poor game sales in the U.S. and Europe for a wave of upcoming game cancellations and layoffs. The company has told investors that it plans to focus on its stable of franchises such as Sonic the Hedgehog, Aliens, and Total War moving forward as it works to streamline its operations. Other titles in development, which haven't been announced, are being scrapped.

Sega Sammy Holdings revealed the news in its statement to investors.

"We conducted detailed reviews of earnings projections for titles targeted toward the U.S. and European markets and decided to narrow down sales titles from the following period and after to strong IPs, such as “Sonic the Hedgehog,”, “Football Manager”, “Total War” and “Aliens” which are expected to continue posting solid earnings," the statement says in part. "In accordance with this, we are canceling the development of some game software titles."

Sega didn't elaborate on what exactly was being canceled, but it's interesting to note that series such as Yakuza, Virtua Fighter, and Bayonetta weren't mentioned as being among the "strong IPs." 

SEGA issued the following statement to Game Informer:

Due to the challenging economic climate and significant changes within the interactive gaming industry, SEGA has made the decision to consolidate its publishing business in order to focus on developing digital content and driving its existing IP such as Sonic the Hedgehog, Total War, Football Manager and the Aliens franchise. 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.  

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.