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Home » Featured, News

SEGA confirms job losses in a push towards the digital sector

Submitted by on Friday, 23 April 2010No Comment

SEGA has cut a total of 73 jobs in its North American and European studios in a major reshuffle that will focus more on the digital sector.

Is this the death of the boxed product at SEGA?

The answer seems to be no – for now at least.  The San Francisco office will now serve as the digital division, while Europe will continue to focus on traditional video games.

Evolution, rather than revolution, seems to be the key word here.  SEGA are keen to maintain a balance between the traditional sector and the digital sector, and have freely admitted they don’t yet know what percentage of their sales they are anticipating will come from this.

Sega West President Mike Hayes had the following to say;

“We’ve been going through the planning process the past 6 months, taking a look at the future of the market and where we think our investments need to be.

It’s no surprise that the share of digital is growing as an overall part of the video game business, so we decided we have to invest more in that specific area.

And notably, we had to get our business groups appropriately sorted to provide the right focus.

What we decided to do is to make San Francisco the kind of hub for our digital efforts, and therefore make London the hub for the traditional packaged goods part. I would stress, however, that this is very much administrative reorganization, because clearly we want to be very successful with digital globally.

Likewise, we want to continue to be successful with traditional goods. So the reorganization allows us to be much more efficient in terms of our costs, but probably more importantly in the way that we can look at the future business.

We’re definitely looking at mobile applications, the iPhone, the iPad – we’re interested to see what happens with Microsoft and others – creating games for PSN and XBLA. Again we’ve had some good successes in those areas. And we’re finding increasingly that ESD [electronic software distribution, such as Steam, Direct2Drive, etc.] is taking a bigger share of our overall revenues, so that’s an important growth area for us. The whole PC field in general is doing well for us.  Football Manager, which is a European title, has done great.

Do we want to move everything from traditional into digital? Absolutely not.”

Hayes then went on to say we should expect some original IP announcements for digital platforms over the next few months.

So what do you think of SEGA’s new direction?  Whilst we agree that some of their IPs – such as Sonic – suit digital distribution, we are glad that they are keeping boxed products for the time being.