Sammy Studios sends staffers packing

Sammy Corporation is one of the most successful game companies in Japan. Over the years, its lucrative pachinko games have provided it with a near-bottomless pit of funds--enough funds, in fact, for the company to purchase a controlling interest in the once-mighty Sega, with which it merged last year.

Just today, the Tokyo-based behemoth reported a net profit of more than $440 million for the nine-month period ending December 31, 2004. That figure, according to the Associated Press, is more than twice the amount reported a year earlier for the same period.

But while Sammy Corp. is doing gangbusters business in Japan, it seems its American outfit, Sammy Studios, has fallen upon hard times. This week, the company issued a statement confirming "staff reductions." The company has yet to specify how many employees were terminated, but the cuts were primarily to its marketing and sales departments.

Yesterday, Sammy briefly addressed the layoffs. "Earlier this week Sammy Studios reduced its sales and marketing staff as part of an effort to put the company’s focus squarely on game development," read a statement issued by the company. "It is difficult having to release some of the very same people we hand-selected to join the company. Yet our development capabilities and our creative and technical talent are intact, and we are confident that we will emerge from this transition as a top game studio."

It isn't clear what plans are in place to replace the functions previously provided by the cut staffers. Sammy Studios' development team, which is currently working on the vampire-Western game Darkwatch, remains intact.

Sammy's US operations were set up in mid-2002. This is the first instance of major layoffs for the company.