Sega Sammy cuts 560 jobs

Sonic house solicits voluntary retirement from 18 percent of workforce, plans to close 110 arcades; full-year earnings revised downward.

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Another day, another massive round of layoffs for the gaming industry. In tandem with grim fiscal results earlier this year, third-party publishers such as Electronic Arts and THQ as well as first-party hardware makers such as Microsoft have cut head count in bids to staunch hemorrhaging losses. Today, Sega Sammy stepped up to the plate, announcing as part of its disappointing nine-month earnings report that it will cut 560 jobs, or 18 percent of its workforce.

Sega Sammy plans to enact its head-count reduction by calling for an early retirement of the specified number of employees. The company expects to issue this call in two weeks, and plans to conclude its cuts by March 31, 2009, the end of its current fiscal year. It also plans to close an additional 110 amusement facilities, as well as scale back its research-and-development expenditures by 20 percent compared to last year.

Sega Sammy's deep cuts come in the face of slipping revenues and mounting losses. For the first nine months of its current fiscal year, Sega Sammy posted shrinking revenues of ¥309 billion ($3.41 billion), which was down from ¥342 billion ($3.78 billion) during the year-ago period. Losses hit ¥10 billion ($119 million) for the nine-month period, which was actually an improvement over the ¥15 billion ($174 million) Sega lost during the same period last year.

"During the first three quarters of the fiscal year ending March 31, 2009, the Japanese economy faced more severe hardships as pressure on corporate earnings from the ongoing and sharp rise in the yen, the country's worsening job picture, and other factors amid continued turmoil in the global financial markets, raised concerns that the real economy would slow further," Sega Sammy said in a statement.

Though Sega Sammy's primary area of business remains its profitable pachinko machines, the company also draws a significant amount of its revenue from its less-than-profitable video game division. During the reporting period, the segment posted an operating loss of ¥5 billion ($62.4 million) on revenues of ¥96 billion ($1.06 billion) for the period. Sega Sammy said that game sales were led by current fiscal-year releases Sonic Unleashed and Football Manager 2009, as well as continued sales of Mario & Sonic at the Olympic Games.

Sega Sammy doesn't expect its fiscal fourth quarter to prop up flagging financial results for the full year. As part of its earnings announcement today, Sega Sammy revised its full-year sales outlook downward 7.4 percent to ¥435 billion ($4.77 billion), with losses expected to total ¥26.5 billion ($290 million).

Discussion

149 comments
S31Ender
S31Ender

[This message was deleted at the request of the original poster]

LindBergh2007
LindBergh2007

S31Ender. It shouldn't matter if Sega is developing just new arcade machines, There's still hope for another console. Know why? Because one: All of SEGA's home consoles are based off of arcade boards and two SEGA has never named arcade board TWO names let alone understans that the arcade market is obsolete in the west. Please stop with your nonsense a haughtyness because SEGA will have the last laugh.

necronaux
necronaux

Damn. Sega, too? Hope they can bounce back.

Wings_008
Wings_008

i love SEGA, i hope they get out of this,otherwise its 2001 all over again

S31Ender
S31Ender

To answer the person below who asked about "SEGA Sammy" Sega Sammy Holdings is a merger of SEGA's arcade units and another arcade company Sammy Corporation. Sammy is a large arcade machine producer. (Think Pachinko machines) that also created a offshoot of itself that published Guilty Gear and a couple of other software games too.

S31Ender
S31Ender

[This message was deleted at the request of a moderator or administrator]

jtthegame316
jtthegame316

i love segas games virtua fighter 5 sega full auto, sega rally, sonic unleashed house of the dead overkill all awesome games. i just wish the xbox 360 would get a light gun that works on hd tvs and some of there light gun games like house of the dead 4 and virtua cop 3 would come on xbox 360

LindBergh2007
LindBergh2007

S31Ender. There's no such thing as a arcade unit without a screen, so your arugment is baseless.

S31Ender
S31Ender

Stand alone video game machines are arcade units without screens. Also mentioned is "arcade game machines with built-in screens." Even look at your links. Your links even state "sega-building-new-arcade-hardware" While I'd love to see Sega go back into the console business, they knew a smart choice (financially) when they saw it back in 2001 when they went software only.

LindBergh2007
LindBergh2007

Before everyone tries to bash SEGA and claim that this is bad news, I have evidence that SEGA may be planning to go back into hardware. Sega Coporation just filed a patent on January 30,2009 http://www.siliconera.com/2009/02/04...cade-hardware/ for NEW next generation hardware called "Ringwide" and "Ringedge". The patent clearly states the words: "Three trademarks popped up for use with video game software, arcade game boards, stand alone game machines and arcade game machines with built-in screens. The trademarks appear to be linked and are for "RINGWIDE," "RINGEDGE" and a logo with rings." Each patent is listed for use in Japan, the U.S.and Europe The Lindbergh's patent filed on 9-3-2005 stated the hardware use for sale only in Asia. And although people can argue about this everyone is losing jobs and money, There is a ray of hope for Dreamcast 2 in this patent. So that brings me to my question, Why GS aren't you reporting this? "Stand along Video Game Machines" clearly means home consoles. http://kotaku.com/5146825/is-sega-readying-new-arcade-hardware http://www.siliconera.com/2009/02/04/sega-building-new-arcade-hardware/ http://news.cnet.com/8301-13506_3-10158267-17.html I ask that many users please take a look at the link and read the details of the patent carefully.

LindBergh2007
LindBergh2007

LinkErdrich. They're not going to end up like Atari. They will keep going. Although Sega does need to publish more solid titles and market thier games better and should stop putting mediocre software. RingWide(wide rings,get it?) and RingEdge(a hybrid and pun pretaining to Sonic "Rings" and "Hedgehog" take the "H" of and you get RingEdge , if these in fact are names for a new SEGA console then I really wish them the best. Who knows they might end up phashing out the PS3(no offense to Sony fanboys.) if they built an affordable 256-bit console with great games thats easy to program and has strong 3rd party support. Sega RingWide( The Japanese moniker?) and Sega RingEdge, The ReGenesis?

bishopphoto
bishopphoto

could this be the death bell for sega? what good game have they come out with since sonic, or for that matter name a game not in the sonic series that was good, new or old?

Timstuff
Timstuff

Nooooo! Now even Japan's arcade scene is dying! :(

joesh89
joesh89

a new sega console + a segata sanshiro ad campaign + shenmue III and a load of other sega exclusive titles = what i want to happen in the next generation console release.

kirby456
kirby456

And that's another thing I'm sick of. Why Sega? Why do you feel it's your duty to make a promising Sonic game, the game that could revive our once awesome blue hero, and make it crap by adding an unnecessary gimmick? Why!? Also your VA for the series went from likeable to unbearable, seriously. I'm sick of the lame 4Kids voice actor whose name is Jason Griffith actually doing the voice of the once beloved hedgehog. Anyone remember when Sonic actually had good voice acting? Yes, I know I'm ranting about a franchise that should be buried and left with all the other once-great video game heroes of the 90s. SA2 and Sonic Heroes (The second being in my opinion) were the last good Sonic titles. After that...a MASSIVE downslide. I still have faith in handheld Sonic games though, because Dimps KNOWS how to make a good Sonic game. What Sega should do is have Dimps develop a 3D Sonic game for 360, PS3 and the Wii...no gimmicks, just straight-up classic Sonic, PLEASE! And let's see some of those other franchises you left to rot: Shining Force, Streets of Rage, Panzer Dragoon, Burning Rangers, COME ON!!!!

kirby456
kirby456

I'm really disappointed Sega. I was hoping you could at least turn it around with Sonic Unleashed. I saw the previews and they all looked awesome... Then came the Werehog... It wasn't as bad as I thought (I played the game and delivered a very in depth review), but honestly, they could've done without the werehog nonsense, they could've done without Dark and Light Gaia, they could've just made it Sonic vs. Eggman again like the good old days...

lamprey263
lamprey263

Albert Einstein said the definition of insanity was doing the same thing over and over again expecting different results. This clearly fits the bill for Sega. They keep focusing their development efforts on their Sonic franchise, and it wasn't enough these games keep failing miserably, they somehow think if they keep making them that it could eventually become their cash cow. I think the Sega staff has talent, that's why it is unfair they're losing their jobs, instead they should be replacing their leadership that keeps calling for more Sonic titles.

FM_punk
FM_punk

Nothing new people getting fired. I feel bad for them but I jsut want sega to die for what they did to sonic. His games sell only to little kids and are horrible they dont even try anymore

Lifeshifter
Lifeshifter

Sega is Sega and the Sammy part is Sammy Studios that was I think based in San Diego Ca

CasinoOutlaw247
CasinoOutlaw247

SEGA! a great company with great games. At least that was the case years ago. I too am looking forward to Sonic's Ultimate Genesis Collection (PS3( but, how about Saturn Collection as well? your legion of fans are still here waiting patiently and I'll be the first to put a pre-order down on it if you make it happen. Take a hint from Capcom when they made Mega Man 9 (making it old-school) we need to return to that and not another Sonic The Hedgehog failure! wouldn't mind Dreamcast collection as well (although that would be a pretty small list lol) I'll take Classic Sega over Current Sega anytime!

lowkey254
lowkey254

@ deathscythe22 Sega Had a wonderful crop of games. I miss those days.

deathscythe22
deathscythe22

My Ultimate Saturn collection: Bug Bug Too Fighters Megamix Shining Force 3 (all scenarios) Shining in the Darkness Legend of Oasis Panzer dragoon 1 and 2 Panzer dragoon saga Burning Rangers Nights into Dreams Guardian Heroes Virtual Fighter 2 Astal Sega Rally Championship Virtua Cop and some others i may have missed. only problem is that probably only a blu ray could hold them all if the collection was big

Nintendo_Ownes7
Nintendo_Ownes7

SEGA Sammy Holdings is the official name that SEGA and Sammy go by because they merged between 2001 and 2005 Sammy Studios is a game company that Published Spy Fiction.

enoslives7
enoslives7

Sega should merge with Panasonic and put out a Dreamcast/3D0 super-system.

deathscythe22
deathscythe22

and i'm sorry but i really haven't seen a good sonic game since Sonic Adventure 2 on the dreamcast. Seriously what is so wrong with going back to your roots?? Going with the games that put you on the map?? Nintendo does it every console generation with Mario, Zelda, and Metroid etc..... I mean hell the Sonic Ultimate Genesis collection is proof. Alot of those games deserve a remake. and i wouldn't mind seeing an Ultimate Saturn collection. lol and i already have the list for it

Poison_Me_Rum
Poison_Me_Rum

It's strange how the mighty have fallen. It seemed that when Sega stopped making consoles, they gave up all together. The only decent Sega game I've played in recent years was Sonic Rush. I look at all the quality Mega Drive games I've acquired over the years and try to work out what went wrong. Could they not get better? I do feel as though Nintendo are slowly slipping down that road to. Which saddens me more. Hopefully developers will see the tough economy as a sign to make some fantastic games for us to play. Now isn't the time for risks and mediocre titles. Anyway, I'm going to stop rambling.

DrKill09
DrKill09

Sega... SAMMY? WTF is that? Wasn't Sammy the name of the kid in the Japanese version of Streets of Rage 3, btw? :P

mastriania
mastriania

I hate to sound like a dumb ass, but who is "Sega Sammy"?

tidyspidey
tidyspidey

yes yes yes - deathscythe, you're right. I would happily fish into my pocket and give Sega money to make Shenmue 3..... I need to see how the story ends - Lan Di must pay!!!

kavadias1981
kavadias1981

deathscythe22 is bang on the money. Shenmue is true legend and needs finishing. Shining Force has never been the same after the SF3 trilogy. Streets of Rage, Panzer Dragoon, Shinobi, all of these are incredible franchises but Sega just dropped them, and for what? Sonic the effing Werehog?? Sonic and the Black Knight??? Jeez, I'm telling you people, the only thing I am looking forward to from them is the Ultimate Mega Drive collection for my PS3. Nostalgia city. One more time, MAKE A NEW SHINING FORCE, SHENMUE, PANZER DRAGOON, STREETS OF RAGE, SHINOBI and PHANTASY STAR for deathscythe22. And do them right! Put your Japanese hearts and souls into them like you used to!

dmfreak
dmfreak

i know that it involves the global economic crisis but still, that's what's gonna happen if they continue to make more crappy games.

insanitycheck3
insanitycheck3

[This message was deleted at the request of the original poster]

deathscythe22
deathscythe22

and please oh please make a new Phantasy Star!!! not those crappy phantasy star online games! those stop being good after like episode 2 or 3. Make it like Final Fantasy WAS. I remember when FF and PS would go head to head in the SNES/GENESIS days

deathscythe22
deathscythe22

oh and bring back Shining Force!!! not the crappy action ones they make these days but the old school strategy ones on Genesis and Saturn. Shining Force 3, all 3 scenarios, was great! still play them today ( an no i can barely read Japanese) THAT IS DEDICATION!

deathscythe22
deathscythe22

The reason why they haven't made Shenmue 3 is because of the millions it cost to make it. I LOVE Shenmue but the general public of America didn't receive it as well as they wanted. So i guess they think they wont get the invested money back. HOW CAN PPL NOT LIKE SHENMUE!!?? i say all fans chip in $5-10 to Sega towards the Creation of Shenmue 3!... FINISH THE STORY!

tidyspidey
tidyspidey

All I want is Shenmue 3 for the 360 and/or PS3.... make it happen Sega!!!

Triplekill
Triplekill

Maybe they should change name haha

Xanzibar_Joe
Xanzibar_Joe

If only they'd start making good games again rather then churning out crappy sonic remakes.

EnaVRi
EnaVRi

Sega has good games lately... Valkyria Chronicles... And also Yakuza Series!... If they just do the Shenmue again and Skies of Arcadia... they could reap a lot money from there... Why o why do they stop the shenmue saga... Bad bad business decision...

Generalmojo
Generalmojo

im still shocked valkria chronicles is a Sega game, how did sega pull that off lol

tonyhawksP8
tonyhawksP8

Sega didn't make good games, so lose loads of money and therefore jobs are cut. This is stupid I mean half the mediocre games out there have the absence of trying to make the game good.

Penalty_of_Hero
Penalty_of_Hero

Always bad when people have to go. But as everyone saying Sega haven't been making so many good games "lately"

CTR360
CTR360

sega its dead developers no big deal this news no new games like shenmue3 panzer dragoon saga jet set radio eco the dolphin after dremcast only crap sonic ganes coming on consoles

xdeiri
xdeiri

[This message was deleted at the request of the original poster]

valcrist09
valcrist09

what happends when you make crap ass games and expect them to sell.. I am glad to see the gaming companys that make these terrible games and sell them for full price and expect mass sales, even the bigger companys are seeing, i hope better quality games start to come out! sucks people are losing jobs though.