SEGA hit by 73 people layoff, more focus on digital games

[Happy Cat]

Sega was hit today by 73 layoffs as part of a business reorganization that will see the company focusing more on social and digital games.

According to a statement received by 1UP, 36 employees in Sega's San Francisco office and 37 in London have been made redundant as part of the reorganization. The San Francisco office will now focus exclusively on digital and downloadable content (as the newly formed "Digital Division") while London will act as the company's administrative hub, as well as handle traditional console and PC games.

"In recent years, digital platforms have taken an increasing share of video gaming revenues and we believe this growth is set to continue," said the statement. "Sega has already enjoyed commercial success within this new and exciting gaming medium and it is now the company's intention to fully embrace change and set a strategy not only to maximize revenues within the digital space but, through innovation and quality, take up a leadership position."

Speaking to 1UP, Sega West president Mike Hayes described the move as "chapter two" in the company's continued evolution after being a hardware manufacturer.

"It's quite interesting, if you look at Sega's relatively short modern history when we reinvented ourselves as a multi-platform publisher, the excitement for us was being on the PlayStation 2 and Gamecube and Xbox, and we sort of travelled a path where our market share has increased significantly over the past five years in both North America and in the European territories," said Hayes.

"[The new focus on digital media] is part of our ongoing expansion, which is great. We have a very strong base now in the traditional business. We still want to grow, we still want to be very competitive, but in terms of development and growing our overall market share, part of that sort of journey for Sega, sort of like chapter two, is this big digital arena," he continued. "It's new, it provides new outlets for us. We can do different things in terms of gaming experiences, which is interesting for us. So in a way it's sort of a part of the ongoing rebirth of Sega as a multi-platform agnostic publisher of games."

According to Hayes, the layoffs were mainly caused by Sega's U.S. and London offices having different employees fulfilling the same tasks - now that both divisions have been further consolidated, according to Hayes, some of these employees are no longer necessary to the company.

"There was a lot of duality, there was a lot of doing the same work twice," said hayes.

"There was a lot of copying between both San Francisco and London. So it's kind of a natural question of how do we become more efficient and affective as an operation, and that's what the exercise has been."

According to Hayes, the move will not impact Sega's current schedule, nor will it affect the number of traditional retail games it releases. 1UP had a chance to speak with Hayes about the company's new direction, as well as the future of its traditional console games, and will publish the full interview tomorrow.

http://www.1up.com/do/newsStory?cId=3178956

[Orta]

This is really bad news, even if a certain someone is part of the layoff.

[Sega Uranus]

I do not like that anyone will lose their job, so I hope that all of the people who lost theirs can get back on their feet right away.

Still, the digital distribution thing is a major plus to me. I have been wanting SEGA to do this for like... Four years. I think it suits their design structure much better. They are an arcade developer above all else remember.

[max_cady]

I'm a bit concerned over the whole casual thing, does this mean they are also getting into the Farmville-type market?

Who knew ventures such as Play Sega were so profitable?

And yes, when a company reestructures(mergers, for example) it almost always means someone will get a pink slip. Sad, but true. I also hope they get back on their feet.

[Sega Stylista]

Okay, 9 years for "chapter 2". . . Just skip to where it says in the marketing plan: "Streets of Rage IV - Digital Release"

[MadeManG74]

Okay, 9 years for "chapter 2". . . Just skip to where it says in the marketing plan: "Streets of Rage IV - Digital Release"

If it's anything like Sonic 4, I would rather they skipped that part as well. Better yet, just tear the page out.

[Sega Stylista]

Nice to see they tore out the page that said "Licensed crap and crappy remakes from shitty studios" and used it as toilet paper.

[Barry the Nomad]

While folks losing their jobs always sucks, I actually am in favor of this change. As the article mentioned:

"the move will not impact Sega's current schedule, nor will it affect the number of traditional retail games it releases"

That;s a good thing, right? Take a look at SoA's first party offerings. What has SoA given us in the past five years in terms of retail releases?

As for SoE, I'm glad that they'll be managing all the administrative work. Better to have one location deal with that than have (from what it sounded like) the same job being done in the US.

Notice that Sega of Japan has not been changed, and will continue to give us games as usual.

[fluffymoochicken]

even if a certain someone is part of the layoff.

Who are you referring to?

[George]

While folks losing their jobs always sucks, I actually am in favor of this change. As the article mentioned:

"the move will not impact Sega's current schedule, nor will it affect the number of traditional retail games it releases"

That;s a good thing, right? Take a look at SoA's first party offerings. What has SoA given us in the past five years in terms of retail releases?

As for SoE, I'm glad that they'll be managing all the administrative work. Better to have one location deal with that than have (from what it sounded like) the same job being done in the US.

Notice that Sega of Japan has not been changed, and will continue to give us games as usual.

SEGA West =/= SEGA Japan

SEGA Japan has been shutting stuff done for a couple of years now, if I recall correctly.

[fluffymoochicken]

Great news, guys! RubyEclipse wasn't laid off!

Yay! ^___^

[Happy Cat]

Great news, guys! RubyEclipse wasn't laid off!

Yay! ^___^

That's great to hear.

[MadeManG74]

That's good news indeed.

I do agree with Barrington that this is overall a good move for them. If it doesn't affect their retail games then more Downloadable stuff is always good. Even if it's just more classics being ported to XBLA/PSN or something I would be happy with that. I don't know much about Play Sega, but if they enhance that service and build it up it would also be pretty good.

[Sega Stylista]

Don't forget Ipod/phone/pad.  Sega needs to continue to build its presence their too.

Ipod/phone/pad and PSN and XLA revenue maximization should be one of the top corporate strategic priorities.

I bought AC today and I'm buying Sonic 4 no matter what.  Now give us the damn digital multiplayer games already!

[Barry the Nomad]

Arcade ports for the last 10 years should be a priority for Sega of America. Remember how many arcade games hit the Saturn and Dreamcast? It seems that so many games have been relegated to arcades. Don't get me wrong, I love arcades and prefer most arcade versions to console ports. However, most Sega arcade games are nowhere near where I live and/or died years ago.  

Each year I'd prefer a handful of AAA retail titles (mostly probably coming for SoJ and third parties like Sumo, Platinum, Rebellion and Obsidian), a few fun but not amazing retail titles and a load of downloadable classics in HD.