Sega announces 'extraordinary loss,' layoffs

Remember Sega, that company that made those games about a blue hedgehog? Their fortunes, already a far cry from the glory days of the Genesis, took a turn for the worst when they announced an 'extraordinary loss' of over 7 billion yen, or around $86 million, and undisclosed layoffs and cancellations, according to Joystiq.

Sega of America said in a statement that the company would “consolidate its publishing business in order to focus on developing digital content and driving its existing IP such as Sonic the Hedgehog, Total War, Football Manager and the Alien franchise.” That leaves a lot of Sega IP unaccounted for.

Sega's statement does its best to sound optimistic, saying that the changes will “position Sega as a content led organization, maximizing sales with a strong and balanced IP portfolio across both packaged and digital distribution.” Hopefully this means that Sega will put all of its effort into using its strongest IP to develop the highest quality games that it can, while dropping its less successful (we hate to say this, but it's true) shovelware businesses.

It's going to be interesting to see how this one plays out. Sega has been through tough times before, but it seems like they've never managed to fully come out of the nosedive that began with the premature death of the Dreamcast. We're either about to see a great comeback, or the sad end of a titan as it spirals into oblivion.

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Lachlan said,
april fools?

by JC Fletcher on Mar 30th 2012 9:35AM

Unfortunately is not

Also read about THQ "cancelling" WH40k Dark Millenium Online, making it a Single Player game not an MMO. They also fired a bunch of people.

Why not decide for another time to design a console that will compete against all others.
Sega consoles were good but they were introducing a new console each year and the failed, that annoyed users because each console had it's own cartridges
Lets take a look at the consoles they released:
Master System 1,2,3
Game Gear
Sega Saturn, Mega Drive, Dreamcast

7 consoles in less than a decade back then and I think I might be missing some.
People couldn't trust Sega because they knew they might release another console next year and preffered the Playstation 1 or N64.
Dreamcast was released in 1999 and Playstation 2 came after that in 2000 (almost a year later)

Needless to say: Dreamcast was a very good console with good games with nice graphics, far superior to PS1 and was competitive to PS2 but sales were truly bad.

MariosX said,

Sega consoles were good but they were introducing a new console each year and the failed, that annoyed users because each console had it's own cartridges
7 consoles in less than a decade back then and I think I might be missing some.

They were on the same release cycle as the rest; 4-6 years.
1985 - Master System
1988 - Mega drive/Genesis (1991 - Mega CD, 1994 - 32X, but neither of these went anywhere)
1994 - Saturn
1998 - Dreamcast

1990 - Gamegear (portable)

The release schedule was not to blame for Sega's failure. They failed to gain anything mass market after the Mega Drive. Clearly they ran out of money, I doubt any bank now would loan them enough cash to make another console.

Sega's failure is because they failed to find a market. They have failed to find a market for nearly 20 years now. That is why they are no longer an internationally recognized company. 20 years of no decent selling product makes you a small player amongst all the other small players.

To be an international name you need a wide spread appealing product, Sega has failed to deliver and will now fade away from the international spotlight.

Edited by bits, Apr 1 2012, 8:04am :

MariosX said,
Why not decide for another time to design a console that will compete against all others.
Sega consoles were good but they were introducing a new console each year and the failed, that annoyed users because each console had it's own cartridges
Lets take a look at the consoles they released:
Master System 1,2,3
Game Gear
Sega Saturn, Mega Drive, Dreamcast

7 consoles in less than a decade back then and I think I might be missing some.
People couldn't trust Sega because they knew they might release another console next year and preffered the Playstation 1 or N64.
Dreamcast was released in 1999 and Playstation 2 came after that in 2000 (almost a year later)

Needless to say: Dreamcast was a very good console with good games with nice graphics, far superior to PS1 and was competitive to PS2 but sales were truly bad.

As stated by bits, they followed/led the same release schedule as everyone else. Hardly one a year. Now if you want to go on about WHEN they released their consoles and with a poor launch game lineup due to development times and publisher time windows for release (See Saturn or Dreamcast) then you would have a good argument.

They wasted their money in failed projects and further annoyed developers and publishers: e.g. Sega 32X and MegaCD.

MariosX said,
Why not decide for another time to design a console that will compete against all others.
Sega consoles were good but they were introducing a new console each year and the failed, that annoyed users because each console had it's own cartridges
Lets take a look at the consoles they released:
Master System 1,2,3
Game Gear
Sega Saturn, Mega Drive, Dreamcast

7 consoles in less than a decade back then and I think I might be missing some.
People couldn't trust Sega because they knew they might release another console next year and preffered the Playstation 1 or N64.
Dreamcast was released in 1999 and Playstation 2 came after that in 2000 (almost a year later)

Needless to say: Dreamcast was a very good console with good games with nice graphics, far superior to PS1 and was competitive to PS2 but sales were truly bad.

I'm sure they'd love to have another console but who is going to finance such a thing and will the developers support it. Sega just a shadow of it's former self that develops games it holds IP for.

Aergan said,

As stated by bits, they followed/led the same release schedule as everyone else. Hardly one a year. Now if you want to go on about WHEN they released their consoles and with a poor launch game lineup due to development times and publisher time windows for release (See Saturn or Dreamcast) then you would have a good argument.

They wasted their money in failed projects and further annoyed developers and publishers: e.g. Sega 32X and MegaCD.


Exactly. Sega's issues had nothing to do with release schedules... They were unable to get exclusive games (or unwilling to play the same underhanded tactics) as Sony was with the PS1. People wanted a console they could get all of their games on.

And now, as a publishing house, they squander their best properties. Where is Panzer Dragoon? Skies of Arcadia? They don't release anything worth getting excited over anymore.

I really hope they can turn things around. Maybe a company like Microsoft could buy into Sega. It would give them the cash infusion they surely need and a console to focus on that does have considerable market share.

Sega seems to have a very bad run of luck, Suffered a serious blow financial wise with the Sega Dream Cast years ago. Now this? I think they should just close down for good or until they get their financial bleeding under control.

TCA said,
Sega seems to have a very bad run of luck, Suffered a serious blow financial wise with the Sega Dream Cast years ago. Now this? I think they should just close down for good or until they get their financial bleeding under control.

The Dreamcast didn't kill Sega, but Sega killed the Dreamcast. It was very successful and before the PS2 came out they couldn't keep them on the shelves. Even after the PS2 it would have been just fine. Their earlier blunders with the 32X and Saturn had already ruined the company and they couldn't afford to compete with Sony.

virtorio said,
I'd put it more down to a long serious of poor decisions and bad games.

I can agree to that. The biggest money maker they had game wise is Sonic for the genesis

No, Sega did lose money(they have for years, wanted to add a new point) the Dreamcast made things even worse. You do realized the price of the hardware used for the console alone, was expensive. Initially over time when it was still in stores they had to cut down the prices which in the end gave Sega no choice but to discontinue with hardware and transition into software...(which isn't helping them either) So they're still bleeding money. Yes the ps2 couldn't stay off shelves, that's the truth...I couldn't get one, had to resort to Ebay back then when it was worth it

I don't understand how so many once great game studios are struggling. Video gaming has never been bigger, more popular, more accessible... where are they going wrong?!

Chicane-UK said,
I don't understand how so many once great game studios are struggling. Video gaming has never been bigger, more popular, more accessible... where are they going wrong?!

Well, in the case of Sega, they seem to have forgotten who they are and what they're strengths were. They don't even seem to remember that they are more than Sonic. Where are their other IP? There was a time when they took gambles on new IP that was amazing. They released first party games only beaten by Nintendo. This should be their focus, and I'd go to the console makers with that.

Chicane-UK said,
I don't understand how so many once great game studios are struggling. Video gaming has never been bigger, more popular, more accessible... where are they going wrong?!

In the 90's, you only need ~10 guys to do a great game. Now, you need a team of > 120 people and a budget that is between 20 to 50 millions.

Super Nintendo games used to have > price tag than the current games that get released on PS3 and X360.

What I'd like to see happen is a merger between Sega and Nintendo. Nintendo needs a fresh injection of new content (Sega's IP). Kind of like two old foes uniting against the current super powers.

AR556 said,
What I'd like to see happen is a merger between Sega and Nintendo. Nintendo needs a fresh injection of new content (Sega's IP). Kind of like two old foes uniting against the current super powers.

That would be awesome!

AR556 said,
What I'd like to see happen is a merger between Sega and Nintendo. Nintendo needs a fresh injection of new content (Sega's IP). Kind of like two old foes uniting against the current super powers.

hahaha, that would be neat. And Nintendo would be able to absorb Sega's debt...

Personally, I think Sega needs a buyout at this point. The problem I see is a buyout or merger by a company like Nintendo would almost assuredly result in closures of most of Sega's development houses (As it would be largely an IP package deal, nothing more as much of Sega's development resources are geared towards other consoles)... I would much prefer a purchase by Microsoft as it would more likely keep the majority of the development houses open... A good restructuring and refocusing on ALL Sega IP would be a huge boon to the company.

I remember how my friends use to say Sonic was so much better than Mario, and that how one day we were going to be plauing Mario on Sega systems. Looks like it didn't happen that way. Sega started to fall after the debute of the Saturn, and it was downhill from there.

Now they only make game titles and they are still falling apart. Sega is to big a company to be onkly selling software. Sonic is old Sega and no one really wants it. They re-released the older games on iOS, but they didn't change nothing.

Just call it quits. The Hedgehog just isn't what he use to be. Mario is the victor in that race

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