SEGA set to shut down it's entire European division and move to digital only?

Sega is to close its European operations and announce its intention to step away from big budget game development in favour of digitally delivered games.

That's according to French site Gamekyo (via NeoGAF) which says the company will shutter Sega Europe and France in the coming months and refocus its remaining studios on development for mobiles and tablets.

"On the eve of E3 2012, we are able to inform you, according to our credible sources, that Sega Europe will be finally closed in the coming months as well as all the local branches in Europe like Sega France, This is partly a consequence of the ineffectiveness of Sega's strategy over the past several years of developing games by western developers.

"At the same time, Sega will also announce, according to these sources, they will no longer develop AAA games on consoles, but will focus on digital games, notably for cell phones and tablets."

According to the site Sega's last big budget release will be developed by Total War studio Creative Assembly, it "will be presented at E3 2012 in a few days."

In March Sega confirmed it will be cancelling a number of its games and streamlining its operations after parent company Sega Sammy warned investors that earnings and profits for the year ending March 31 will be hit by its underperforming games business.

Sega of America later warned many of its "internal functions will be re-structured and this could result in a number of redundancies within the publishing business across the Western organisation". It also recently delayed Gearbox's Aliens: Colonial Marines into 2013 and revealed The Cave, an "odd and compelling" digital adventure from Double Fine.


It'll be a real shame if this turns out to be true as Sega are a big part of videogame history. It'll also mean the loss of a huge amount of jobs!

cant see this being true?

I unfortunatly can mate, Sega have had a rough time of late with very little in the way of decent selling games

there fault for put backing alien's so fucking long

not according to one of their directors

LINK

It would be a shame to see Sega going this way tbh. From being 1 of the 2 biggest names in the industry going back to the SNES/Megadrive games to making games for mobile phones?

Should not be allowed to happen

A sad day for Gaming History and I was hoping it would be EPiC as they Fucked Gears up Dam Them.

[UPDATE]
Sega has today confirmed closure of most of it's European division and it's new focus on digital....


Closing a number of Sega’s territorial offices has been a ‘painful’ but ‘logical’ process, Sega Europe’s COO Jurgen Post has told MCV.

Today, the publisher confirmed it will shut offices in France, Germany, Spain, Australia and Benelux and hand sales and marketing duties over to local companies.

The shift comes as Sega puts digital content first, with just a handful of boxed product releases a year, after failing to break new IPs into the retail channel.

“It’s painful, it’s not an easy process, and we have had to make a lot of changes,” said Post.

“But we had to do it. We have been looking at past results, and as we all know the market is tough at the moment, it’s polarising so the bigger games are getting bigger and it’s harder to break new IP.

“The business is shifting so fast we had to make the decision. It was inevitable: we couldn’t continue like we were before.”

Post told MCV that Sega will now focus on its ‘four IPs pillars’ of Football Manager, Sonic, Total War and Aliens: “65 per cent of our business is generated by those four key IPs. So that is what we will concentrate on.

“And within them we will diversify, we really want to go broader with those titles - as we are doing already with things like Football Manager is successful on PC but also now iOS and Android, and Sonic in its many forms.”

Sega has not been alone in slimming down its operation. THQ has also recently done the same across Europe – and like Sega it has handed key territories over to distribution force Koch Media.

Said Post: “In a way it’s logical. All publishers are focusing on less IP and if you only have a couple of titles, some things have to change.

“However, if you are a distributor, if you can combine all of those together, all of a sudden you have a great business model. I think it’s good for the strong distributors at the moment.”

Ultimately, the switch comes down to correctly cultivating Sega’s line up of games. The publisher has tried many times over with new IPs and non-Sega brands, and has been disappointed with the results.

“We’ve tried with a lot of products to break new IP or new brands into the market but we haven’t succeeded,” said Post.

“Some categories are just not working in the market anymore. Titles like Iron Man 2 or other film licences, they don’t work.

“Then we tried with new IP; again it’s very tough to get into the market so we basically decided to stop that kind of project because it just takes so much money out of the company. You have to invest in the development and then you have to invest in the marketing and even then it’s still a big gamble.

“With the market shifting at the moment and new platforms coming in, it was just the best time to slow down a little bit and focus on what we do best, and that’s those four pillars.

“You have to embrace the new world, and you can’t continue doing everything like you were doing it in the past. If you only stick to what you know, you will have a very short success.”