Sega canceling games, restructuring business

Company canning unnamed games as part of shift to become smaller and strengthen digital content; full-year financial outlook cut in half.

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Sega is going through tough times. This morning, the Japanese game company announced it was halving its financial forecast for the fiscal year, canceling games, and restructuring due to the "rapid change" in the game market.

Sega has canned some titles, but didn't say which ones.

Part of the process is canceling upcoming titles. Sega did not specify which games have been axed, and as of press time, Sega had not responded to GameSpot's request for comment.

Sega made clear that forthcoming games from the Sonic the Hedgehog, Football Manager, Total War, and Aliens franchises have not been canceled.

As a result of the changes and market conditions, Sega is predicting an extraordinary loss of ¥7.1 billion ($86.4 million) for the year ending tomorrow, March 31, 2012, with ¥4.9 billion ($59.7 million) directly related to the restructuring.

Additionally, Sega said it plans to streamline its organization in the United States and Europe. The company said this move will better position the firm for "sustained profitability." Sega did not say if jobs were cut as a result. Further, Sega said it plans to increase its involvement in the digital market, but did not map out anything specific.

For its fiscal year, Sega now expects revenue to come in at ¥394 billion ($4.8 billion), down from the ¥440 billion ($5.4 billion) it expected previously. Additionally, profits are expected to dip nearly 50 percent, from an originally estimated ¥38 billion ($462.6 million) to ¥20 billion ($243.5 million).

Discussion

346 comments
godzillavskong
godzillavskong

Man. This is sad news to me. I've always been a fan of the Sega brand since the Sega Master System. They always seemed to offer something different for me, and their games appealed to me more then the Nintendo offerings back in those days. My best friend growing up would go the opposite, going with the NES, SNES, N64, etc, while I continued to enjoy Sega platforms up to the late Dreamcast. While I enjoy all games in general, no matter the brand, Sega will always hold a special place in my heart .

ChiefFreeman
ChiefFreeman

The Sega needs to be dissolved, since it only exists by name anyway. They're mainly just a publisher now anyway, and a poor one.

gino_pachino
gino_pachino

@Llama345 i dont think you remember what you posted to me because it make a while that i didint have conected to gamspot..i just have read my inbox anyway...you tought that my comment was weird because i have "predict" that maybe apple will make a console on the new gen console and you know what i just saw on gamesot 2day apple game console rumored for 2012....Llama345 i dont think you remember what you posted to me because it mke a while that i dindint have conected to gamspot i just have read my inbox anyway...you tought that my comment was weird because i have "predict" that maybe apple will make a console on the new gen console and you know what i just saw on gamesot 2day apple game console rumored for 2012....http://www.gamespot.com/news/apple-game-console-rumored-for-2012-launch-6371858.....:)

gino_pachino
gino_pachino

Llama345 i dont think you remember what you posted to me because it mke a while that i dindint have conected to gamspot i just have read my inbox anyway...you tought that my comment was weird because i have "predict" that maybe apple will make a console on the new gen console and you know what i just saw on gamesot 2day apple game console rumored for 2012....:)

p40tomahawk
p40tomahawk

@Bumblebee1138 Posted Apr 4, 2012 6:41 pm GMT "p40tomahawk Never heard of it." it's a game for the wii

BelmontWolf
BelmontWolf

i have a horrible feeling shenmue 3 was onna the canned games =(

SIDEFX1
SIDEFX1

I feel for Sega. I believe they deserve more and more credit for what they do and accomplish.

LindBergh2007
LindBergh2007

Kjranu. No. Its a new company. The trademark is simply WAY too large and filled with 500 different products and 5 pages worth of descriptions. I only showed you a part of the new trademark, if you want me to sent you more of the mark itself including decriptions for original media hardware,nd held electronic games, namely, {identify with specificity, i.e., handheld electronic games adapted for use with television receivers}; handheld game apparatus with liquid crystal displays; electronic hand-held game units for use with an external display screen; Just sent me a PM and let me know. Because there's plenty in this ORBI mark you can't even imagine.

Kjranu
Kjranu

@LindBergh2007 It's probably new arcade hardware more than anything. Sega isn't coming back to the console business, sadly. But the fan in me will always hope they will come back to the business so I can buy their new console day one.

Lordcrabfood
Lordcrabfood

Real shame, the mega drive, probably my fav system ever. Loved the Shining series, landstalker. I just wish sega would stop with all the sonic games and concentrate on other ip's. Translated versions of Shining Force 3 part 2 and 3, I would buy in an instant.

sortajan
sortajan

it's hard to take sega seriously these days. i miss what they used to be, they were important to my childhood.

bluespire1
bluespire1

I'm still pissed with them concerning the sudden end of the Dreamcast console I bought back in 1999 and they suddenly gave up on it because of the PlayStation 2 release. Maybe Bayonetta 2 can save their butts.

TightNinja
TightNinja

Sega started falling off during the Saturn era why?? They simply refuse to capitalize on the great IP they have created over the years. They are the polar opposite of Activision rather than milk a franchise to death they are "one and done" publisher and that stops any momentum they could have. TJ and Earl Shinobi PS2 (revived the action platfomer for 2000 and beyond, so many games copy from this its ridiculous) Burning Rangers Nights Streets of Rage (best example of letting a gold mine IP die!) Golden Axe (Beast Rider was garbage, no co-op seriously?) Spikeout (one of the greatest beat em up ever) Shenmue (they shuold have finished it while it was still hot, yes it was expensive and yes I would pay $59.99 for a 3 game collection, without graphics update) These are just some of the games that deserve a new generation reboot or sequel. If the above games had let say 4 player local and online co-op....how could Sega not make money! Call of Duty didn't gain real steam until the 4th offcial entry in the series. Sega could at least make ONE new gen sequel or reboot to these games! This article below really sheds some light as to why Sega just can't figure it out. http://www.sega-16.com/2005/02/tom-kalinske-american-samurai/

digi-demon
digi-demon

Power Drift, Super Hang-On, HOTD1, VF Series + and all other cla$$ic SEGA arcade, Saturn & DC titles need to converted to XbLive & PSN asap -Go on SEGA - you know it makes sense :D

LindBergh2007
LindBergh2007

These are bits in pieces taken from Sega's "Orbi" trademark doc: }; video game software; computer game programs; computer games software; video game discs and cartridges; video game programs; game programs for mobile telephones; game software for personal computers; downloadable game programs; downloadable games files; mouse mats; home video games; electronic circuits and CD-ROMs containing game programs for use with hand-held video game machines; home video game software; game software for hand-held game machines; game equipment sold as a unit for playing a parlour-type computer game primarily composed of {indicate principle components, i.e., video game software, computer hardware, computer monitors}; cinematographic machines and apparatus; optical apparatus and instruments, namely, {identify with specificity, i.e., optical disc drives and players, optical sensors, optical readers}; It sounds VERY well like they're referring to hardware.

LindBergh2007
LindBergh2007

Kjranu. SEGASammy will soon be no more. Sega Orbi is forming.

LindBergh2007
LindBergh2007

xXsNiPeRtHeFoX. With the formation of Sega Orbi, they shall make that a reality.

csward
csward

@Kjranu Nintendo, SE, Capcom, Konami, ect. have all experienced a drop in quality. Nintendo is starting to climb out of that problem, but a lot of Japanese developers still have a lot of bad games in the pipelines because since the GTA 3 days they couldn't make games as good as the West.

digi-demon
digi-demon

Sega was 'purchased' by Sammy - Segas future was doomed because of all the lemmings who listened to Sonys exagerated Specs for PS2, and so dismissed Dreamcast on release to wait and get a PS2 - though many later lamented the PS2's terrible launch lineup, default bordered 50hz display, low spec DVD and the poor initial line up - but too late for Sega. Addmitedly the PS2 did eventually come good - but at PS2 release time DC provided the superior game experience.

Jessica_M_C
Jessica_M_C

[quote]Additionally, Sega said it plans to streamline its organization in the United States and Europe[/quote]Unless you plan to release NA/EU versions of future Phantasy Star, Valkyria Chronicles, and Hatsune Miku series games, you may as well close those offices.

Virtual_Erkan
Virtual_Erkan

Bayonetta, Vanquish, Sonic Generations, Binary Domain, Valkyria Chronicles and many more games are Sega's gem collection. I am currently looking forward to Jet Set Radio HD which I still own the original and Dreamcast.

Megamoss1984
Megamoss1984

Three words Sega: Streets...of...Rage...

Kjranu
Kjranu

Dreamcast 2 , hoo-ah!

xXsNiPeRtHeFoX
xXsNiPeRtHeFoX

want to make money SEGA get back into the console race come on you can do it GENESIS HD or DREAMCAST HD

Kjranu
Kjranu

I would also like to add that my Dreamcast (13 years old Dreamcast and still works like new) still is the centerpiece of my 40' HDTV and I won't move it except for a successor to the Dreamcast. I'm still waiting, Sega!

Kjranu
Kjranu

The Sega merge with Sammy was quite possibly the worst move they could have made. Sammy is only a pachinko maker, not an actual game developer. Why do I call it the worst move they've made? Simply because Sammy doesn't offer anything that could have helped Sega in the gaming industry. It also made it very hard for Sega to merge with a relevant partner since they were already tethered to Sammy. Sega is in some kind of spiral, and it's yet to be seen how they will get out of this. They have to make PSO2 really good if they want to get out of this downwards spiral and get back on the top. One big difference between Sega and Nintendo is the quality control. We get loads of bad Sonic games that does nothing but tarnish their image. On the other hand, Nintendo may put out games designed for younger games but at least they are well-made and only improve their image. Time to get it right, Sega, if you ever want to get back in the console business.

Ultramarinus
Ultramarinus

If they cancel Valkyria Chronicles series, they could as well shut down the company for all I care. Better in fact so someone else can buy the rights to continue it. Creative Assembly would go on their own anyway, Total War is safe and sound.

drknessfeeds
drknessfeeds

This really is sad and a bit of a shock after playing Binary Domain. Though the story is a bit cheesy the game is a blast to play. I hope they make a comeback.

kashkropsntokes
kashkropsntokes

Dear Sega: MAKE GOOD GAMES AND CONSUMERS WILL BUY THEM. Sonic Generations was a fine start. But where are the other good titles? ...I'd totally play a Shenmue remake.

MrPuzzlez
MrPuzzlez

Ever since I've known them, Sega has made the worst business practices I've ever seen...

iHeardYouLiekMe
iHeardYouLiekMe

I've lost a lot of interest in Sega games. In my opinion, Sega fell on it's face after Gamecube. Sure, they've made some good games between now and then, but that doesn't seem to be making a big difference here. What I think Sega needs to do is listen a little more to their fans. I know lots of people that want a Sonic Adventure 3, and it seems like Sega would actually do something like that. Don't get me wrong, Colors and Generations were pretty good, but if I had to choose between those and the Sonic Adventure series then I would go with the Sonic Adventure series. And to solve the issue of all these great games not being bought I think they should distribute demos somehow. With the Jampacks for Playstation I know that I wanted some of the games on there. It was very effective in it's goal, but Sega didn't jump on this too much if I remember right. I barely saw any Sega games on a Jampack if at all. I don't want Sega games to die out like the consoles did. RIP Dreamcast.

Nerissa
Nerissa

If Sega is canceling games and such, they are cutting jobs, that is the only way to try to maintain profits. This is sad for all the employees and families.

Shredwolf
Shredwolf

Sega of all the companies doesn't deserve to be in this position. It's a damn shame, they were the ones in last 5 years actively coming with new franchises like Bayonetta, Madworld, Valkyria Chronicles, Shadow of the Damned. Actually most of them had quite a glowing reviews, too. I just do not like the game industry nowadays. Gamers keep complaining about redundancy that, redundancy this, yet they keep buying those Cod series. I feel the gamers in general seem to focus too much on the negatives. Sure Sega keeps milking Sonic, but at least they do have more quality titles than other gaming giants. And about people demanding Shenmue 3, quit being unrealistic. Shenmue 1 & 2 costed fortune to make them and returned a very little revenue, of course, Sega would have some reservation about continuing the franchise. In my opinion Shenmue 3 needs support like kickstarter project more than any other franchise.

JtAgentX
JtAgentX

Sonic The Hedgehog had it's share of low quality games, but no Sonic game every flopped financially. The 2006 disaster that came out for the 360/PS3 sold over 2 Million Copies in 3 years.

maniaxe613
maniaxe613

Although I can understand Sega's decisions, canceling games is never a good thing. Games being canceled especially hurts fans and as a Sega fan, I can only wonder which potentially great titles Sega canceled.

p40tomahawk
p40tomahawk

@Bumblebee1138 they also did a great job with Ghost Squad

Bumblebee1138
Bumblebee1138

@nintendoboy16 So Sega was only able to do ONE thing correct. In that case they DEFINIETELY needs some resurrecting.

nintendoboy16
nintendoboy16

@Bumblebee1138 *looks at Sonic Colors* Can't say I agree.

Ketorulz
Ketorulz

There's nothing inherently wrong with Sega's franchises. Look, unfortunately with gaming creativity comes a financial responsibility as well. Sega has had financial issues way before this as well. What it is simply is having to allocate to the masses rather than the minority. While it is unfortunate, it's the way it has to be to survive in the gaming industry. No longer can we simply depend on long-term franchises. We must cater to a mobile audience as well, which is growing. This is happening in ALL facets of technology, including businesses. People want to do stuff on the go too, without the need of tedious setups. That's just the reality.

TheRez
TheRez

I wonder what this means for the future of Phantasy Star Online 2 as it pertains to a release outside the Japanese market... As much as I love Sonic, its time to put him to bed as a major platform title. Keep the episodic releases flowing since there is a nostalgia market for the high-speed side scrollers, but stop making (and burning to disk, and shipping, and otherwise burning money on) the platformers. Hopefully this new focus on digital content is going to mean more TLC for the Phantasy Star franchise. There is a growing market for pick-up and play style games in the mobile market; If done correctly, the next PS game could be a money printing hit; micro-transactions, if done wisely, could be a major revenue source.

Ghetto_ninja
Ghetto_ninja

The problem with Sega is their games sell poorly again and again. Lots of time it's because the game has hideous flaws. Such blunders as Aliens Vs. Predator's online monstrosity and Sonic Unleashed's night time levels continue to kill Sega. Not to mention the fact that their critically successful games are usually niche titles, like Vanquish, Bayonetta, and Valkyrie Chronicles. They need to take some ideas from small Japanese companies like Aksys and NISA's business models.

AFiercePancake
AFiercePancake

@acer7x You're not the only one who wants a Condemned 3 to come out.

Ghetto_ninja
Ghetto_ninja

In response to guy that says all other sport games having multiple games, 2K has a contract with MLB, although somehow MLB The Show is still around legally. That contract expires this year though. On top of that the whole 2K sports franchise was bought by take-two interactive so Sega doesn't have a chance in hell in the sports game market.

ElementalSoljer
ElementalSoljer

This is what happens when you sit on releasing games that your fans want.

iPostMaReviews
iPostMaReviews

@PlasmaBeam44 Sonic Generations wasn't too bad, I think there's hope for Sonic Team. If the next one sucks, well...