Bless your soul, Creative Assembly.
SEGA’s recent financial report has been dismal. The Japanese giant reported a net loss of ¥6.65 billion JPY ($41.165 million USD) during the fiscal year from April 1st, 2023 to May 31st, 2024. Their overall operating profits have plummeted, with SEGA recording an 86.7% drop.
In terms of sales, however, SEGA has fared relatively well, reporting a 2.6% year-over-year decrease with ¥186.655 million yen. This performance is likely driven by games such as “Like a Dragon: Infinite Wealth,” “Sonic Superstars,” and “Dragon Gaiden: The Man Who Erased His Name.”
Yet, as we have come to understand the modern gaming climate, video game development today requires significantly more time and money. While SEGA may have achieved solid sales with franchises like Sonic and Yakuza, they are bleeding money, much like Bandai Namco.
Another reason SEGA recorded a net loss is likely due to the cancellation of HYENAS, developed by Creative Assembly. HYENAS was intended to be a PvPvE heist shooter featuring some of the ugliest and progressive character designs in gaming, at least until Sony revealed their live service hero shooter, “Concord.”
HYENAS was set to feature a drag queen character, but at the final hour, right after its beta test concluded in September 2023, SEGA pulled the plug on this ambitious project and scrapped it entirely.
HYENAS was said to have the largest budget for any game SEGA had ever made, which is believable given the overinflated costs of current game development. Following the game’s cancellation, SEGA announced the scrapping of various other unannounced titles due to perceived “low profitability in European regions.”
SEGA’s previous financial results over the nine-month period ending December 31, 2023, were grim. While SEGA’s gaming division saw a sales increase of 4.2% year-over-year, its operating income dropped by 52.5%, further highlighting the unsustainability of modern game development, even if a game meets all the criteria for Larry Fink’s ESG agenda.
SEGA has undeniably shifted focus, aligning more with Western sensibilities and DEI (Diversity, Equity, and Inclusion) initiatives, much like Capcom. This shift has led to a perceived loss of their Japanese identity, evident in actions like Persona’s self-censorship to remove a trans joke and hiring conservative grifters like YongYea to voice Kiryu in Yakuza‘s English dub.
Another contributor to SEGA’s losses is their active structural reforms across their European division, along with the layoff of 61 employees from their American branch. Due to the challenges of the modern gaming market, primarily driven by consumers waking up to the fact that they are no longer obligated to purchase subpar products made with malicious ideologies.
SEGA sold off Relic Entertainment and cut approximately 240 employees across several Sega Europe studios, including Creative Assembly.
SEGA has not only downsized its Western branches but also recorded a restructuring loss of ¥12.955 billion yen, equivalent to $80.46 million USD. This significant loss pushed them over the edge.
SEGA is likely to continue this trend, recording more losses as their mainstream single-player titles fail to generate enough profit despite increased sales. In fact, the company has just announced that their Crazy Taxi reboot will be an open-world MMO experience.
Essentially transforming a classic into a stupid live service game which makes sense given how SEGA announced a prolific partnership with Microsoft back in 2021 to create large-scale global games that has seen numerous SEGA titles launch on Microsoft’s Game Pass platform, which has undoubtedly led to a massive decline in sales and profits.
