SEGA Europe will close five offices under the control of its European business this year as it focuses on core brands Aliens, Sonic, Total War and Football Manager, alongside its digital business.
"We are aligning business strategy, and we will be closing our offices in France, Germany, Spain, Australia and Benelux," SEGA Europe COO Jurgen Post told GamesIndustry International this morning.
The move is part of Sega's previously announced plan to streamline the company in the US and Europe, a move which will cost the business $83 million.
The UK studios, The Creative Assembly and Sports Interactive, will not be affected by the decision.
Post would not confirm how many jobs will be cut as a result of the closures.
"It's about the territories. UK stays as it is, we'll have some layoffs across the territories of course, but we don't give out any specifics on that," said Post.
"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."
"We want to diversify, so we want to have an increased focus on those brands. And we want to become better and more successful"
And how does that affect new IP outside of those current brands?
"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," said Post.
"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."
Koch Media will take over distribution Germany, Switzerland and Austria, France and Spain, with Level 03 handling Benelux and 5 Star Games looking after Australia.
"Level 03 distribution is basically the old management team in the Benelux setting up their own company and 5 Star is basically the old Sega managing director with some of the team setting up a distribution company in Australia," clarified Post. Those partnerships start July 1, but he explained the process of would be given time to ensure it's as smooth as possible.
"We'll still have our offices in the territories and we'll close them down towards the end of the year. So it's not like we're moving out straight away, we still want to continue relationships with retail, manage the stock and trade, and have smooth transition to third party distribution."
PR and marketing for the territories will be conducted by the aforementioned distributors and SEGA Europe's London headquarters.
"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," Post said, when asked about the bigger changes in the industry that had resulted in the decision.
"We had to make the changes we are making right now, in order to be better prepared for the future"
He added that the shifting nature of the games industry could be seen in the success and number of new platforms, Android, iOS and Steam, and business models.
"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."