Following a story last night rumouring a closure of Sega's UK Racing Studio's Sega has confirmed the move.
"Regrettably Sega today announced that it is to commence consultation regarding the unfortunate closure of the Sega Racing Studio in Birmingham, UK," the company told Next-Gen.
"The decision is part of a review of Sega's Western Development Studios to ensure that each studio is a profitable entity in its own right, and unfortunately the Sega Racing Studio’s 5 year plan would not result in a successful return for the Sega business moving forward. Sega would like to stress that there will be no changes within their other internal development studios."
Racing Studio was responsible for last year's Sega Rally, a project that proved to be its one and only game.