1. Reason The Consumer Business centered on SEGA CORPORATION is expected to post operating loss in the year ending March 2012, due to the challenging economic climate and significant changes in the home video game software market environment in the U.S. and Europe. Given this circumstance, the companies determined that in order to actualize earnings recovery of the Consumer Business in the following period and after and return to a growth path, it is essential to streamline organizations in the field of home video game software in the U.S. and European markets, while shifting to a structure that corresponds to change in environment, including strengthening development in the field of digital content.
2. Descriptions of measures
(1) streamline organizations We will streamline organization in the U.S. and Europe home video game software. This will create a smaller company positioned for sustained profitability.
(2) Reduction of number of titles We conducted detailed reviews of earnings projections for titles targeted toward the U.S. and European markets and decided to narrow down sales titles from the following period and after to strong IPs, such as “Sonic the Hedgehog,”, “Football Manager”, “Total War” and “Aliens” which are expected to continue posting solid earnings. In accordance with this, we are canceling the development of some game software titles.
(3) Booking impairment loss on work in process assets We will book impairment loss on work in process assets concerning some titles after reevaluating the profitability of work in process concerning game software which are going to be sold in the U.S. and European markets from the end of the current fiscal period to the following fiscal period.
(4) Processing of inventory In accordance with the streamlining of organization in the U.S. and Europe markets, we will estimate allowance for expenses among game software inventories, including inventory on the market that is currently circulating.
4. Future outlook
In the year ending March 2012, we are planning to record 7.1 billion yen in extraordinary loss as expenses in accordance with the structural reform, which the cost is believed to be 4.9 billion yen. Please refer to “Notice of Extraordinary Loss and Adjustment to the Forecast of Operating Results” announced on the same day as its forecast for the full-year consolidated operating results for the year ending March 2012.
this is all Binary Domain's fault OBVIOUSLY damn you ZFS
it's important to note that most of the lost revenue is a direct result of cancelling projects. otherwise, they'd be announcing a $27 million USD loss.
-- ICON: When there's nothing left to burn, you have to set Bidoof on fire.
From: ninkendo | #001 (2) Reduction of number of titles We conducted detailed reviews of earnings projections for titles targeted toward the U.S. and European markets and decided to narrow down sales titles from the following period and after to strong IPs, such as “Sonic the Hedgehog,”, “Football Manager”, “Total War” and “Aliens” which are expected to continue posting solid earnings. In accordance with this, we are canceling the development of some game software titles.
Man, I hate when this happens. Publishers just won't take risks in this climate.
-- Ace Detective in Sir Chris' Police http://img225.imageshack.us/img225/4258/1118030354863.jpg
Its a real shame some of the really good new IPs they've made in the last few years haven't had the commercial success they deserved. The likes of Valkyria Chronicles, Madworld, Bayonetta, Conduit etc. I expect those are the kind of things we won't be seeing more of.
Yes, they're cutting back on other games - though I still expect a Bayonetta 2 announcement... sometime - but to say that Sega doesn't take risks is just silly.
-- ICON: When there's nothing left to burn, you have to set Bidoof on fire.
House of the dead: overkill is another really good recent release. I'd guess poor marketing and consumer targetting, of those 5 three of them were mature games on the Wii which is a well documented bottomless pit for 3rd parties. VC was amongst the best games of the generation and I hadn't even heard of it until it was already released, they just didn't drum up the hype it deserved. Bayonetta seemed better marketed and suited for its audience, I'd guess that one sold ok.
Not sure if Sega all stars racings falls under the Sonic umbrella and is safe or not. The naming of it suggests they didn't feel it could carry itself without the Sonic brand.
From: Rad Link 5 | #015 sad they apparently got punished for those risks and likely won't be taking many more.
It is, I'd say they've been one of and if not the highest risk taking developer of the generation. They've made a lot of new IPs of good to great quality, looking at these reports you can see why Nintendo are so conservative. Had SEGA copied them and sat on previous successes like making a bunch of Sonic spinoffs I doubt their earnings would be so grim.
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Yeah I really hope this won't stop Bayonetta 2. Sega really has been great about funding new IPs and taking risks. Sucks that it's not paying off for them.
I think Anarchy Reigns is already too far along in development. Isn't it coming out in a couple months? Hopefully Platinum finish both that and Revengeance, then quickly move back to Bayonetta 2.
-- ICON: When there's nothing left to burn, you have to set Bidoof on fire.
I wish they'd put more of a focus on Valkyria Chronicles. 2 didn't get that well received because kinda jarring setting change and PSP only, but it was still good and the first one was absolutely amazing and had insanely good reception. They never brought 3 over and it was another PSP one so I guess that's understandable, but you'd think a good one on PS3 again would be successful.
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I have no idea who you are, but I thank you for arousing me. - Beruga Brawl FC: 3823-8243-5663
I remember reading someone from Sega either implying or outright saying that we will probably never see Valkyria Chronicles in the west again, which is more believable if they're tightening their belt.
I wouldn't think Bayonetta would be in trouble considering it sold nearly two million copies worldwide, but who knows.
-- Ace Detective in Sir Chris' Police http://img251.imageshack.us/img251/5783/3989110m.png
From: iiicon | #033 i don't think that game looks very good. if they sold the 2d sections separately i'd be down
You should give it a chance. This isn't Sonic 2006, the 3D sections are actually a lot of fun too, which I wasn't expecting.
Anyway this just blows. Sega has been one of the best companies for putting out interesting looking new IPs, including Binary Domain which was a blast and I thought had potential for good sequels. Its a pity that they couldn't cash in on their great works.
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I'd say this was disappointing for Sega, but I really haven't bought many of their games. I enjoyed the recent Sonic games, but MadWorld is WAAAAAY overrated compared to how people kept saying "buy it, support Wii games!"
Big Bob posted... I'd say this was disappointing for Sega, but I really haven't bought many of their games. I enjoyed the recent Sonic games, but MadWorld is WAAAAAY overrated compared to how people kept saying "buy it, support Wii games!"
Sega is great at making amazing games and finding amazing games other people made which need a publisher. I don't know how they can fail to make good money putting out games like MadWorld, Bayonetta, Valkyria Chronicles, Vanquish, Aliens Infestation (when they said Aliens was profitable you know they didn't mean the DS sidescroller that struggled against cancellation), Shinobi, and Binary Domain. I guess their marketing and business sides just don't know what they're doing when it comes to selling these games. Because don't forget, "losing money" doesn't just mean that it cost more to make than it brought in. It can also mean that it made significantly less money than they were expecting it to, resulting in Sega having less money now than they had been counting on. A game can lose money while still being profitable.
Then again, if they were realistically evaluating the profit potential of these games, they might not put them out in the first place, so I can't get too mad at them for being clueless.
-- SuperNiceDog didn't have to reconcile his name... But Dauntless Hunter is now MrGreenonion
Sega never brought over VC3 because nobody in America buys PSP games. Maybe a digital version would do well if the Vita catches on.
"I don't know how they can fail to make good money putting out games like MadWorld, Bayonetta, Valkyria Chronicles, Vanquish, Aliens Infestation (when they said Aliens was profitable you know they didn't mean the DS sidescroller that struggled against cancellation), Shinobi, and Binary Domain"
Most of the games you mentioned were released at a time when when Sega were profitable. Binary Domain is really the only game there that was probably a financial drain over the last year.
"Then again, if they were realistically evaluating the profit potential of these games, they might not put them out in the first place, so I can't get too mad at them for being clueless."
That sounds like what they're doing! As I mentioned earlier, the majority of this loss is from the cancellation of projects and the subsequent internal restructuring.
-- ICON: the raindrops the raindrops the raindrops the raindrops the raindrops the raindrops the raindrops the raindrops
Sega has been behind some great games lately yeah, but their marketing sucks. And I think people kind of want more of the same anyway. But a lot of it has to do with Sega not convincing people they would be interested in these other games.
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Tornadoman78: tornadoman and tornadogirl like to kick box each other in my tornaolayzers and she dosent even mind getting hit