Sega announced today that it would be shutting down its offices in Australia, France, Germany, Spain, and Benelux (made up of Belgium, Netherlands, and Luxembourg). The company did not state the specific reason for the closings, but it has been known for some time that Sega is in the process of "streamlining" its operations and canceling games. This would seem to be a cost-cutting measure that will allow Sega to save money by outsourcing part of its international distribution.
Starting July 1, Sega will have two separate companies handle the distribution of packaged goods that was previously handled by the closed offices. Koch Media will handle distribution across France, Germany, Switzerland, Austria, and Spain. Level03 Distribution will handle distribution in Benelux, and 5 Star Games will do so in Australia. Operations will continue to be managed through Sega's European Headquarters in London, which has not been shut down.
“Sega is entering a new and exciting phase that will position the company as a content led organisation, maximising sales with strong and balanced IP such as Sonic the Hedgehog, Total War, Football Manager and, the Aliens franchise,” said Jurgen Post, chief operating officer of Sega Europe. “The company will benefit from a clear focus and realigned strategy for our digital business and packaged goods and we are confident that this will lead to a successful future.”
Despite Post's confidence, it's clear that Sega is in trouble. The company has driven it's Sonic the Hedgehog brand into the ground over the last decade with poorly reviewed titles. Aliens: Colonial Marines has been delayed until February 2013, meaning Sega will not have a blockbuster title out for the coming holiday season.
At E3 this year, Sega revealed its new strategy of developing smaller games and remakes for platforms such as the Xbox LIVE Arcade, PlayStation Network, and Vita. The company also showed off its new embrace of social media, setting up an Instagram and Foursquare account for the event.