The corporation issued a notice to investors on Friday explaining that it expects to make just $34 million in net profit by the end of the financial year; a nosedive in performance compared to the $260 million it made the year prior.
The struggling publisher, which formed in the 1940s and shifted its business into video games by the late '80s, will also reposition its business to center it around “smartphone and PC online gaming.”
Although drastic measures, Sega has been planning this shift in business since May 2014. To what extent this will further narrow its games console business is unclear. Sega’s key releases of 2014 were Alien: Isolation, Rome 2 Total War, and Sonic Boom.
Unfortunately, this likely means more free-to-play style games on Steam, the App Store, and Google Play, rather than the stand alone single player Sega games many of us enjoyed in the past.
I expect we’ll still see some big console games (Sonic, etc), but it doesn’t look good for Sega’s less well known IPs.
Working on Segalization got me in touch with a number of people who are now losing their jobs (and didn’t deserve it). Sad to see this happen.
It is sad but a fair reflection on the state of the industry. To be honest, Sega have released enough chaff in the last few years that I don’t think it’ll be a great loss if they cut down on their console releases. If they make the next Farmville then perhaps we’ll see Shenmue 3!
Unfortunately it’s the nature of business. Smart businesses invest in the long term and invest in what they perceive to be are growth industries. Sega isn’t really in a position to do that like Activision which makes a billionaire dollars yearly from a single COD game.
The future of online games is micro-transactions such as buying unique armor in-game. I’m not sure how Sega can capitalize on that market even if they localized PSO2. The subscription market is in terminal recession. Few people have time to commit to online games at the moment, so they play casually.
It must be hellish in Japan being forced to adapt to the portable market there. But to be honest, considering the overall economic outlook, which really isn’t good, even surviving will be an accomplishment.
If I only had the capital or backing to buy up some of their underutilized IP. They really didn’t execute on any successful franchise they own. Maybe someone with a clue will offer to buy the Panzer, Shining, and Phantasy Star rights and do something positive with them.
PSO2 should be localized. The situation with the Shining series is understandable, although not ideal. I would love to see another Shining Force strategy/RPG.
One series that Sega should have really taken seriously was Golden Axe. Medieval fantasy has always been insanely popular. That was wasted potential.