Sega lays off 73, restructures with focus on downloadable titles

Sega announced today that they will be tackling a massive restructuring of their US and European operations. Sega West President Mike Hayes told IndustryGamers that there will be a total of 73 redundancies comprised of 36 in San Francisco and 37 in London. The London branch will now handle traditional retail games, while the remaining San Francisco staff will be focusing solely on downloadable titles.

In a statement to IndustryGamers, Hayes said, “We've been going through the planning process the past 6 months, taking a look at the future of the market and where we think our investments need to be. It's no surprise that the share of digital is growing as an overall part of the video game business, so we decided we have to invest more in that specific area. And notably, we had to get our business groups appropriately sorted to provide the right focus. Traditionally, Sega of America and Sega Europe had been running a dual company where both would look at traditional goods and both would look at the digital side. What we decided to do is to make San Francisco the kind of hub for our digital efforts, and therefore make London the hub for the traditional packaged goods part. I would stress, however, that this is very much administrative reorganization, because clearly we want to be very successful with digital globally. Likewise, we want to continue to be successful with traditional goods. So the reorganization allows us to be much more efficient in terms of our costs, but probably more importantly in the way that we can look at the future business.”

Earlier this year Sega announced that Sonic 4 will be coming as a downloadable title, so they already have projects in the “digital” pipeline. Hayes mentions all the big platforms: XBLA, PSN, Steam, iTunes and others as part of their approach to downloadable titles. He also says to look forward to new IP announcements for downloadable platforms “over the next few months.” 

Hayes is also quick to quell worries that tradition games are not forgotten with this new focus. In a statement to 1UP, he said, “the move will not impact Sega's current schedule, nor will it affect the number of traditional retail games it releases.” This segregation of market approaches between branches may be just what Sega needs to streamline their struggling business.

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18 Comments

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I dont know about you guys, but these downloadable titles scare me in a way.... I pay for them, but who's telling me they wont "revoke" them in the future like amazon did with that book before? Like in the Wii Virtual console I loved the idea of buying back all my old games..... but what happens when nintendo shuts down the virtual channel, do we lose access to them? Can they revoke our access?

neufuse said,
I dont know about you guys, but these downloadable titles scare me in a way.... I pay for them, but who's telling me they wont "revoke" them in the future like amazon did with that book before? Like in the Wii Virtual console I loved the idea of buying back all my old games..... but what happens when nintendo shuts down the virtual channel, do we lose access to them? Can they revoke our access?

I'm assuming with new consoles comes new revenue for people to transfer their purchased content. They would have nothing to gain by taking down the servers unless the platform of a specific console fails.

Azies said,
Hmm.. Steam...meaning Sonic 4 might be on PC? -crosses fingers-

What makes you think Sonic 4 will be on Steam?

Sonic. said,

What makes you think Sonic 4 will be on Steam?

He said might. Also, steam is mentioned in the article.

Edited by bb10, Apr 24 2010, 12:06pm :

Its not just happening at Sega its happening at most Developers/Publishers, The transition to "Digital Downloads" from the traditional boxed retail market is the killer. Developers are in a better position than Publishers as they are the ones that actually make the games, Expect more bad news.............as games development goes full circle and back to the bedroom......

Well, any redundancies Sega can find that might help streamline the business so that they can continue to improve financially is a good thing in my opinion (Though I do feel bad for those being layed off...).

I really miss the Sega of years ago when I was a kid and they had the money to invest in new IP's... Panzer Dragoon, Skies of Arcadia, Nights, and a host of others have gone forgotten...