“It is hereby notified that Sega Sammy Holdings Inc. is expected to record extraordinary loss in the year ending March 2012,” a financial document published today by Sega begins. It goes on to mention that, due to these extraordinary losses, the company will implementing a structural reform of Sega’s consumer games—the term used for home console/portable software—division.
One of the unfortunate consequences of this is that games will be cancelled.
Sega haven’t specified which ones, but a separate document reads: “We conducted detailed reviews of earnings projections for titles targeted toward the U.S. and European markets and decided to narrow down sales titles from the following period and after to strong IPs, such as ‘Sonic the Hedgehog,’, ‘Football Manager’, ‘Total War’ and ‘Aliens’ which are expected to continue posting solid earnings. In accordance with this, we are canceling the development of some game software titles.”
Sega’s losses for the fiscal year are amounting to 7.1 billion yen (about $86.4 million), which includes losses incurred by the ongoing structural reform. As part of the announcement, the company halved its forecast numbers. In addition to the cancellation of certain games, Sega will streamline organization in the U.S. and Europe to create a smaller company that they feel will be better positioned for sustained profitability.