Western studios to be streamlined as digital options are explored further
Publisher Sega has announced that it will be canceling game projects as the publisher prepares to publish its financial reports later this month, which will show higher than expected losses.
A statement from Sega said, “Given this circumstance, the companies determined that in order to actualize earnings recovery of the Consumer Business in the following period and after, and return to a growth path, it is essential to streamline organizations in the field of home video game software in the US and European markets, while shifting to a structure that corresponds to change in environment, including strengthening development in the field of digital content.”
The company plans to streamline its Western studios by making them smaller, which it believes will make them more financially viable. This also means that the publisher will be reducing the number of games that it will release and has therefore canceled some projects currently in development, although it has not stated which ones.
However, Sega did confirm that key franchises such as Sonic the Hedgehog, Football Manager, Total War and Aliens would not be affected by these changes. The tech company explained that these franchises were its strongest IP and were thus still financially viable.
Heavy losses have prompted the move from Sega, as confirmed in its statement, “In the year ending March 2012, we are planning to record 7.1 billion yen in extraordinary loss as expenses in accordance with the structural reform, which the cost is believed to be 4.9 billion yen.”
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