Sega With 7.1 Billion Yen Loss, Canceling Games

It’s weird to think that video games as a whole are booming and just raking in the cash ($65 billion in 2011) and yet everyday, it seems like studios are shutting down, people are getting laid off, and news outlets are closing. Maybe it’s just a sign of the times; the big studios are struggling while the independent and mobile ones are thriving. Of course, that has its own issues, as who knows if Zynga-style monetization plans for success can last.

Cue Sega this morning with a report bearing the most disheartening and ominous title you may see today: “Notice of Extraordinary Loss and Adjustment to the Forecast of Operating Results.” Translated to common parlance, things are looking bad and things are going to get worse. The key point in the reports is that Sega Sammy (Sega became a subsidiary of Sammy in 2004) expects operating losses for the past year to reach 7.1 billion yen, or $86.6 million USD.

The reaction and now current course of action for the company is the “streamlining of organizations and the canceling of some game development” in the US and Europe. This is in hopes of working with the “change in environment” and “strengthening development in the field of digital content.” In particular, this means reducing the number of game titles in development and focusing on their “strong IPs,” such as Sonic, Football Manager, Total War, and Aliens.

When your profits drop from 38 million yen to just 20 million yen, you can expect things to get a bit unpleasant. So far, these details are fairly vague and appear to be more just general notions and guidelines for how they will be improving things in the next year. No specific titles were listed as canceled nor was the word “layoff” ever used (but what else can you expect when they say “streamlining” and “smaller company”). A few of the planned titles for 2012 from Sega include Virtua Fighter 5: Final Showdown, Jet Set Radio, Aliens: Colonial Marines, Phantasy Star Online 2, and Yakuza 5.

If anything happens to Colonial Marines or Jet Set Radio, lord help me I will build a tower of bacon cheeseburgers, light it aflame, and watch it crumble to ashes and not shed a single god damn tear because you can’t cry when your soul has already been crushed.

All right, that’s an exaggeration, but I still really want to play those games.

Source: Sammy Sega and Sammy Sega

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  • racingfreak92

    Great article Tim!