SEGA Posting 7.1 Billion Yen Loss, Laying People Off, Cancelling Projects

Oh, how the mighty have fallen. SEGA, once the biggest threat to Nintendo’s videogame throne is now “streamlining” operations in the West to control losses.

When I said “streamlining,” it means SEGA will be cutting jobs and cancelling a few games to try and recoup some of its financial problems.  Citing the challenging economic climate and changes in the videogame sector for the US and European territories, SEGA has revealed they’re expecting significant losses in their upcoming year-end financials with net income projections slashed by about 50 percent to 18 billion Yen from 38 billion Yen for the year ending March 31, 2012.

For reference, in the same time period last year, SEGA posted profits of 41.5 billion Yen.

Even with their projected income slashed by 50 percent, the publisher is still predicting a small profit for the year total, but it does expect an extraordinary loss of 7.1 billion Yen due to the changing gaming climate.

It remains to be seen how many jobs will be cut by the company and what games will be affected by this restructuring. In saying this, it’s also worth mentioning that SEGA of America is NOT closing down. Contrary to popular rumors, SEGA has confirmed that their North America office will continue with day-to-day operations.

We’ll update the situation as it develops.

Source: The Verge