Sega Sammy expects its overall profit for the fiscal year ending 31 March to be half of what it originally forecast. As a result, the company has announced that it will cancel a number of upcoming games and restructure its entire games business.
Overall profit will be ¥20 billion (roughly £153m). ¥40 billion had been forecast originally.
The company has blamed the “challenging economic climate” and a change in the videogame market in Europe and the US on the drop in expected earnings.
In its bid to raise profits, Sega has said that it’s “essential to streamline organisations in the field of home videogame software in the US and European markets while shifting to a structure that corresponds to change in environment, including strengthening development in the field of digital content.”
The company goes on to say that it will become “a smaller company positioned for sustained profitability,” which essentially means jobs will be lost.
Moving forwards the plan is to concentrate on long-running, successful franchises such as Football Manager, Total War and Sonic the Hedgehog.
As a result of the restructuring, Sega expects to record losses of ¥7.1 billion (£54.3m).