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Sega streamlining games unit, predicts “extraordinary” loss

Friday, 30th March 2012 10:19 GMT By Johnny Cullen

Sega Sammy’s said this morning it’s planning for a “extraordinary” loss of ¥7.1 billion due to the business’s games arm underperforming, with a restructure set to take place and games to be canned.

In a warning to investors this morning, it noted its financials for the year ending March 31 would streamline operations as a result.

Overall net income will be half of what was expected at ¥20 billion (£153 million), while losses as a whole will be ¥7.1 billion (£54.3 million), with ¥4.9 billion (£37.5 million) of the cost to be for the restructure.

The move is due to “the severe economic environment in the U.S. and Europe and rapid change in market environment of home video game software,” it said this morning.

“Amid such business environment, the Company decided to implement structural reform of the Consumer Business at Sega Corporation to strive for a shift to a structure corresponding to the market environment for the purpose of earnings recovery in the following period and after.

“In accordance with the decision, the Company is expected to record extraordinary loss totaling around 7.1 billion yen, including costs in line with the streamlining of organizations and the canceling of development of some game software and costs for processing inventory.

“As for the Consumer Business in the following period and after, the Company projects decreases in operating expenses due to the reform.”

Sega will now rely on current IPs such as Sonic the Hedgehog, Football Manager, Total War and Aliens, with development on other titles to be cancelled. It’s not known what the cancelled games are, however.

There’ll also be job losses, according to Sega, so it can carry “a smaller company positioned for sustained profitability”.

Details here and here.

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15 Comments

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  1. G1GAHURTZ

    What would they do without FM?

    #1 2 years ago
  2. varsas

    It’s sad that the new games like Bayonetta, Vanquish and especially Valkyria Chronicles didn’t sell when they reviewed well.

    #2 2 years ago
  3. SplatteredHouse

    They’ve been reluctant and maybe a little too slow in adopting digital downloads, and overall, their promotion hasn’t been great. That can’t have been helping them.

    #3 2 years ago
  4. silkvg247

    If they’d done good PC ports of stuff like Bayonetta and promoted on steam I can’t help but think they’d be doing pretty well about now. But all they give us is megadrive classics?!

    #4 2 years ago
  5. OlderGamer

    Makes me ill thinking of a games world w/o Sega. I hope they turn things around.

    #5 2 years ago
  6. loki

    say thx to PC
    PC is way to fail

    #6 2 years ago
  7. lama

    #5 agree, it would be sad.

    #7 2 years ago
  8. OlderGamer

    I wonder what kind of an impact second hand games sales have had in Segas current situation? A game like Bayoneta, while a cool ride, is a one and done type game. It is the kind of title a lot of gamers will pick up once the price drops or if they find it used.

    Perhaps more focus on better PC products, like Silk mentioned would be a better way of going. No used games sales on PC after all. I know that PSO2 is PC centric. Could be part of their new strategy.

    #8 2 years ago
  9. NeoSquall

    @2 Ask it to some idiots that keep saying that reviewers that give high ratings to games that sell few copies are either paid by the publishers or something like that.

    Bayonetta, Vanquish and Valkyria Chronicles are all good games that deserved their scores, and a little bit more in some cases, but haven’t been understood by the public because they were either marketed to the wrong audience or to the wrong platforms.

    #9 2 years ago
  10. GrimRita

    @6 spoken like a true idiot. Look at their strongest IPs – Football Manager and Total War – both PC exclusive.

    However, I am certainly Shogun 2 didnt rock the world like Empire TW did in terms of sales because CA have fucked about with the series so much, that its become a pile of shit.

    The only hope is if they bring us Rome Total War 2, without the dumbing down seen in Shogun 2.

    #10 2 years ago
  11. Simula

    I have Valkyria chronicles, okay game – Sold over 1 million
    I have Bayonetta, great game – Sold almost 2 million
    I have Vanquish, okay game -sold almost 1 million

    I’m not sure how Sega and Nintendo take their shares on Mario & Sonic games which have sold over ten millions..But Sega is publisher on those..

    Even if it takes some loss now, its not that big problem..I think?

    #11 2 years ago
  12. Maximum Payne

    @11 Publishers get around $10 for $60 games so yea I also not big problem.

    #12 2 years ago
  13. absolutezero

    “A game like Bayoneta, while a cool ride, is a one and done type game.”

    The thing is that Bayonetta is the exact opposite of that, the game is packed with content. One of Kamiya’s founding principles is that his games should never need DLC because there should always been enough in them that its not needed.

    Thats why RE 2 had 6 different campaigns, thats why DMC had all those different modes, and thats why Bayonetta has multiple modes, unlockables, new characters, hidden weapons and a hell of alot more. Theres so much in that game to keep you occupied its unreal.

    It now seems like a huge waste of time and effort when its just seen as a “once and done” game anyway.

    Im some respects im slightly glad that Sega are scaling back the gaming side, it started with killing those terrible Marvel games. I hope they manage to keep a fine balance between the great PC stuff like Total War and the amazing console games like all the Platinum games.

    Enough with the Sanic though please.

    #13 2 years ago
  14. The_Red

    F*** this is sad. Also, does it mean Bayonetta 2 and Anarchy Reigns are cancelled!?!?

    #14 2 years ago
  15. Da Man

    What #13 said.

    #15 2 years ago