SEGA has announced the cancellation of the development of the first-person multiplayer game “HYENAS,” developed by Creative Assembly, along with other unannounced titles that were in development by its European entity. This decision is made in response to declining profitability in the European region, which led to a review of the securities portfolio of each development base in Europe.
In an official statement, SEGA SAMMY HOLDINGS INC. reported that it expects to record losses for the fiscal year ending March 31, 2024 as a result of these cancellations. The company had established Consumer as one of its growth areas and had seen rapid revenue growth in recent years through global branding of its existing intellectual properties and other measures.
However, the economic situation in the European region has changed rapidly due to declining demand to stay at home during the COVID-19 pandemic and inflation. This has led to a decline in profitability, especially in European bases. To quickly adapt to these changes and improve profitability, SEGA has decided to implement structural reforms aimed at increasing efficiency, mainly in its European bases, and has reviewed the portfolio of titles in those bases.
Measurements include:
- Cancellation of titles in development: In response to lower profitability in the European region, the title portfolio of each development base in Europe has been reviewed, leading to the cancellation of “HYENAS” and some unannounced titles in development. This will result in a write-down of work in progress for titles in development.
- Reduction of fixed expenses: A reduction of various fixed expenses will be implemented in several group companies in the relevant region, with a focus on Creative Assembly Ltd. One-off expenses related to the reduction of fixed expenses are expected to be incurred.
SEGA will continue to consider measures to improve profitability in its European bases, and will provide specific details and the impact of these decisions as they are made. This cancellation of projects represents an important change in SEGA’s strategy in the European region.
Fountain: Gematsu
