Sega loses $85 million; plans to lay off staff, cancel games

Tough times are ahead for Sega (and it’s parent company, Sega Sammy Holdings). During it’s most recent earnings report, the publisher confirmed that it expects to post an extraordinary financial loss “due to the challenging economic climate and significant changes in the home video game software market environment in the U.S. and Europe.”

What that means is that Sega isn’t selling as many games as they expected they would, so they’re about to lose a ton of money. In this case, the company estimates that the total loss will be close to $85 million (which is seven billion yen).

As you might have guessed, Sega’s solution to their money woes is to lay off staff (“create a smaller company positioned for sustained profitability,” according to Sega) and the cancellation of future projects that don’t come from “strong IPs.” Sega confirmed that future titles in the Sonic the Hedgehog, Football Manager, Total War and Aliens franchises are safe.

The publisher did not detail which games would be canceled, but the company is working on a slew of titles outside those properties including Anarchy Reigns, Jet Set Radio HD, Yakuza 5, Hell Yeah! Wrath of the Dead Rabbit, and possibly a Shenmue remake.

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John Scalzo is Warp Zoned's Editor-In-Chief and resident retro gaming expert. You can follow him on Twitter or email him at john AT warpzoned DOT com.

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