Report: Sega hits kill switch on Rally Revo studio

In the first two months of this year, the gaming industry outperformed analysts' already ambitious double-digit growth expectations by a significant margin. However, as the industry on the whole defies economic slowdown, it has left a trail of carved-out hulks in its wake. Since the beginning of the year, high-profile studios such as Perpetual Entertainment, Iron Lore Entertainment, Stormfront Studios, Castaway Entertainment, and Pseudo Interactive have all run aground.

Today, one more studio joins those littering the wayside. UK trade magazine Develop reports today that Sega's internal Solihull, England-based Racing Studio has been shut down, effective immediately. Sega gave no reason for the closure, and had not responded to GameSpot's request for comment as of press time. It was also unclear whether Sega would be pink-slipping the studio's workforce or reassigning staff to other studios within the company.

Founded in 2005 and led by former Codemasters studio director Guy Wilday, Sega Racing Studio has been credited on only one project, 2007's Sega Rally Revo for the Xbox 360, PlayStation 3, and PC. Although respectably received, the game has sold a mere 44,000 units in the US across all platforms through February, according to the NPD Group. Sega Rally Revo was Sega's first outing on current-generation consoles for the classic arcade racing series.

[UPDATE] Following today's report, Sega confirmed to GameSpot that Sega Rally Revo's poor performance did indeed play a part in the studio's closure. "Regrettably Sega today announced that it is to commence consultation regarding the unfortunate closure of the Sega Racing Studio in Birmingham, UK," said Sega in a statement. "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 five-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."