SEGA, once one of the biggest players in the console market thanks to their 8-bit Master System and the phenomenal success of the Mega Drive (or Genesis for our American friends), has been in a spot of bother of late. Their last two consoles, the Sega Saturn and the cult-favourite Dreamcast underperformed, losing out to Sony’s PlayStation family of consoles.
So Sega bowed out of the expensive and risky hardware market to become a third party publisher and developer – which is why you’ll now find Sonic the Hedgehog on just about every machine capable of playing games. But it seems SEGA just can’t climb back to the top – and is set for some heavy restructuring in order to stay afloat.
According to SEGA Sammy holdings, the company is expecting significantly lower earnings than it had anticipated. Instead of the 38 billion yen ($460 million) the company was banking on, they now expect to end the year with $20 billion yen ($240 million) in income. As a result, the company will now be “streamlining” its Western operations, cancelling a number of projects in the process. SEGA will now focus on proven franchises like Sonic the Hedgehog, Aliens, Total War, and Football Manager.
"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," Sega Sammy wrote, "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."
“We will streamline organization in the US and Europe home video game software,” reads the statement. “This will create a smaller company positioned for sustained profitability.”
While it sucks that more people in the gaming industry are losing their jobs – and that this type of post is becoming a daily occurrence – I think I’m probably saddest that this means Shenmue 3, or even an HD re-release of the first two games will likely never happen.
Last Updated: April 2, 2012