Cleverly named a 'structural reform', Sega's planned job axing and production halt on certain titles is expected to take place in the coming weeks. It is thought the US and EU branches of the business will be streamlined in an effort to focus on profitable titles and franchises.
The official statement from the firm reads: "The Sega consumer business is expected to post operating loss due to the challenging economic climate and significant changes in the home video game software market environment in the US and Europe."
"It is essential to streamline [our] organisation in the field of home video game software, while shifting to a structure that corresponds to a change in environment, including strengthening development in the field of digital content."
The main game series set to continue development include Sonic the Hedgehog, Football Manager, Total War and Aliens. Other titles not fitting under these umbrellas could face a stall in development or cancellation altogether.
Along with THQ's downsizing and the big change up UK retailer GAME is facing, even if it is likely to be saved from complete closure, this news about Sega is incredibly worrying. It's a perfect indicator of how developers and publishers are turning their focus even more to sequels and proven IPs in an effort to stay profitable.
This could lead to less innovation in an industry that with the next generation of consoles just around the corner, is ripe for new characters and stories.