Sega to downsize, axe certain games

[Detective Shadzter]

Sega to downsize, axe certain games

by Dominic Sacco

Sega is expecting to post a loss of £54m (¥7.1bn) for its fiscal year ending March 2012, and has outlined plans to restructure.

Parent company Sega Sammy Holdings has today said it will carry out a ‘structural reform’ of Sega’s consumer business. It said it will ‘streamline’ its US and European video game operations and “create a smaller company positioned for sustained profitability”.

As part of the changes, Sega will reduce the number of games it produces and cut the development of several titles, while focusing more on digital content.

A statement read: “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.”

http://www.mcvuk.com...in-games/093657

Guess it's not surprising, because they've been posting losses for most of the past year with the occasional profit gain. Sucks that they only seem to do well with those four same franchises listed in the article: Sonic, Football Manager, Total War and Aliens. I'm personally not liking the sound of focusing on digital content, but that's the way the industry is going :-/ Hope they can start performing better soon and that no big titles are cancelled.

[Marcello]

Well, fuck. I don't like the sound of this at all.

[Chaos Warp]

Well, at least Sonic The Hedgehog is still a title they are keeping. Hopefully their flagship title stays retail, it's kinda important to me to own physical copies of Sonic games.

And let's be positive: Maybe this is for the better and more money can be directed at Sonic games because they won't be losing as much money elsewhere. But yeah, it still is kinda sad.

[Velotix von Skruviktorrius]

So basically they're being forced to modernise and not take on the publishing burden for other developers' IPs. I suppose this is the last vestiges of SEGA the first-party game company finally being cut loose.

Let's face it, SEGA's been treading water for about a decade now anyway, they may be happy just staying afloat rather than trying to be the influential powerhouse everyone remembers and wants them to be.

[Dreadknux]

The thing is, a company has to live within its means. It's been coasting along for so long, but it's had a real problem marketing any of its games properly. Hopefully the restructuring will allow for a bit more marketing capability on its titles. If it focuses on things the company knows will sell for the time being, there'll be more money in the future to spend on bigger risks.

I wouldn't exactly discount digital either - it seems to be the place where SEGA is innovating an awful lot recently. Look at Arkedo's Hell Yeah title for an example of that, along with its re-releases of old titles (which will hopefully give it a bit of extra cash for original projects). Binary Domain, a great game, probably cost a lot of money to make - and it didn't sell over here. And it was made with a Western audience specifically in mind.

The news sucks, but I wouldn't count them out just yet. There's hope that they could turn this around by simply focusing its efforts a little better on guaranteed success stories. If the guys suddenly learn how to market, then that would be smashing. The last massive successful campaign I remember SEGA doing for one of its big IPs was, in fact, Sonic Heroes. The mock A-Team TV ad campaign made Heroes one of SEGA's biggest-selling titles of recent years. Let's hope someone remembers that.

[Badnik Mechanic]

Maybe they should advertise games that do not have a blue hedgehog in them?

They just released Binary Domain, that game is amazing, it really is... yet nobody is playing it because Sega just havn't bothered to advertise it at all. And no, advertising it on the Sega Blog doesn't work since your only appealing to your own userbase.

The Yakuza games which are also really good, anyone ever seen adverts for them outside of the Sega blog?

But of course this isn't exactly new criticisms is it? How many years have they just not advertised any games other than Sonic?

[sonfan1984]

I thought SEGA also do their advertsing on youtube and facebook.

[Badnik Mechanic]

I thought SEGA also do their advertsing on youtube and facebook.

Yeah on their own accounts, who on earth sees that unless some random website bothers to pick it up and report it?

[Barry the Nomad]

i read the first post, got all pissy and angry, took a walk, came back and read the story on some other sites and have now calmed down.

thinking back, this all makes sense. SEGA of America being exclusively digital, Nagoshi taking over in Japan. Basically what was selling in the US and UK will continue to be made. Risky Western titles will no longer get big disc releases, instead I'm guessing we'll see XBLA and PSN titles.

As for Japan, I assume things will continue as they have. Phantasy Star, Sonic, Yakuza will all be big IPs that sell well either in Japan or abroad. Nagoshi in charge will make sure to make every big release a quality title.

What this may be an end to are games like the Marvel releases, indie titles like Crush (those will shift to digital) and SEGA West stopping publishing stupid risky titles that end up getting 6/10. More focus on quality digital releases and big selling IPs.

[PSI Wind]

I just hope SoA localizes the PC version of PSO2 for something like Steam. Spiral Knights is doing quite well for them last I heard.

[Dobkeratops]

Don't you dare mess up with Platinum Games, SEGA. The action game genre needs a Bayonetta 2.

The Yakuza games which are also really good, anyone ever seen adverts for them outside of the Sega blog?

Yakuza games are already very, very successful in Japan. Overseas they don't exactly set the world on fire so they've opted for small scale localizations (translating the text only is super cheap) so they can achieve a decent profit within their niche audience.

Hell, Yakuza 2 bombed so hard we stopped getting the games for a while. I'll take the low-profile-but-still-worth-releasing approach before a do-or-die gamble. The western gaming audience is not manly enough to give the series the success it deserves.

I just hope SoA localizes the PC version of PSO2 for something like Steam. Spiral Knights is doing quite well for them last I heard.

PSO2 is not going anywhere. The downsizing will be done with regards to side projects, new franchises and partnerships.

[Scar]

"SEGA are planning to release a new console!"

Oh......wait......

But in all seriousness, I was half-expecting this. I hope they keep Platinum Games though. They're far too good to just let go. Perhapse merge them into in-house developers.

Edited March 30, 2012 by Scar

[Kuzu]

"SEGA are planning to release a new console!"

Oh......wait......

But in all seriousness, I was half-expecting this. I hope they keep Platinum Games though. They're far too good to just let go. Perhapse merge them into in-house developers.

Considering Anarchy Reigns is coming out this summer, I'm pretty sure they'll keep them around. I mean after Madworld, and Bayonetta would you release them?

[Mono]

Why can't Sega be like it use to be?

It's been downhill since Saturn.

[Kuzu]

Why can't Sega be like it use to be?

It's been downhill since Saturn.

Money will do that to ya, at least they're better off than a lot of other third party developers.

[Your Vest Friend]

Why can't Sega be like it use to be?

It's been downhill since Saturn.

Because they made a lot of poor decisions since (and before) then.

[Blue Blood]

Considering Anarchy Reigns is coming out this summer, I'm pretty sure they'll keep them around. I mean after Madworld, and Bayonetta would you release them?

Games like MadWorld and Vanquish are the exactly the sort that SEGA are going to be cutting. They're risks, and regardless of their quality they sold poorly and got very little marketing. Binary Domain would be another.

[Tori Himemiya]

"That's one way to get thinner!"

The whole article summed up in one quote. Sorry but I had to.

[Jetronic]

There shouldn't be too many problems just as long as they don't pull some of the stunts Konami did, other than that they'll be good.

Edited March 30, 2012 by Jetronic

[Tails spin]

I feel sorry for those who liked the other series than the four mentioned. But to be honest Sonic is the only IP that I really care for from Sega. ( Unless they bring out an excellent Toejam and Earl game)

[Carbo]

It's worth noting that the games Sega are axing are unannounced games, titles behind the scenes. They're still keeping their commitment in regards to titles like JSR, Anarchy Reigns etc. So yeah, Platinum Games are definitely going to get the short end of the stick on this one.

Their situation sounds awfully reminiscent of Nippon Ichi circa 2010 and Capcom circa 2009 where the consequences are a result of them doing the right thing. Although thankfully in the case of the former, one game (Disgaea 4) was enough to remedy most damages.

Get ready for even more Sonic games, now ones which involve Super Edition re-releases!

[Red Cap]

Get ready for even more Sonic games, now ones which involve Super Edition re-releases!

I don't know about the rest of you, but I'd buy Super Sonic Generations.

I wonder what those games they were working on that got cancelled were going to be?

[Marcello]

Hope to God not the Shenmue and Skies of Arcadia ports.

[Balding Spider]

Welp this sucks, I really wanted to see Sega continue doing more new stuff like that Rhythm theif game on the 3DS. But hey more Sonic guys..... *sigh*

Edited March 30, 2012 by Balding Spider

[Chaos Warp]

But hey more Sonic guys..... *sigh*

Why is this bad? It might mean they can have a bigger budget for Sonic games because they won't be losing as much money on their bad-selling IP's.

Edited March 30, 2012 by Chaos Warp