Update: I was unfortunately not aware of Shamus Young's severe criticism of Fallout 3 available here to link in the original piece and I regret that. It dovetails rather nicely with what I've written and it's much better executed than my piece. I strongly recommend anyone...
Sega Europe COO Jergen Post revealed that the company will be closing a total of five European offices in France, Germany, Spain, Australia, and Benelux by the end of the year. Luckily, the UK studios The Creative Assembly and Sports Interactive have been spared.
This move is not that surprising given that Sega already announced they would streamlining their company in US and Europe, but it is worrisome to see any well-known developers closing down so many studios within the next five months.
Sega will re-focus its efforts on Aliens, Sonic, Total War, and Football Manager as well as their digital downloads:
Basically for us it's putting a lot of focus into those studios and into their IPs. So Total War coming out of Creative Assembly, Football Manager coming out of Sports Interactive, so we want to diversify, so we want to have an increased focus on those brands. And we want to become better and more successful with those.
At the moment for us those are the four IPs we are talking about, they are our AAA IP. At the moment we are looking into options of course, but it's not like we are already developing some other titles in addition to that, no. It's a focus on those four core IP, and in addition to that we'll have digital. And digital still means 50-75 releases every year, so that's still a big number.
Jergen Post also commented on how difficult it is to introduce new IPs in the current market:
The big IPs are becoming bigger, whether that's FIFA, Call Of Duty or Assassin's Creed, those titles are just becoming bigger and bigger and it's harder and harder to break into the market with new IP. And there's a big transition at the moment.
It's still a fantastic business, because if you combine everything it's massive and it's growing. But we had to make the changes we are making right now, in order to be better prepared for the future.