Despite positive numbers for the industry as a whole most medium sized publisher have been struggling to turn a profit lately and Sega is no exception to this rule. In the first 9 months of the current fiscal year (1 April - 31 Dec) Sega Sammy lost $118 million (compared to a loss of $173 million during the same period in the previous year).
Sega named Mario & Sonic at the Olympic Games, Football Manager and Sonic Unleashed as its top performers. Naming the latter is clear evidence of how poorly some of Sega's titles must have sold. Sega did not have many big releases during the fourth quarter of last year apart from Sonic Unleashed and will be hoping to recoup some of their losses during this quarter as the next chapter in the reliable Total War series (Empire) is released along side wild cards like House of the Dead: Overkill and Mad World for Nintendo Wii, as well as Obsidian's Alpha Protocol and possibly both The Conduit and Aliens: Colonial Marines. If all these titles are indeed released this quarter it should help Sega out a bit, however chances are one or two are delayed (most likely the latter ones).
Sega hope to return to profitability next year by cutting expenses and a total of 560 jobs worldwide. They are hoping to achieve this mainly through voluntary redundancies. They are also cutting back on their arcade operations. One big problem for the Sega Sammy Corporation is the down turn in Sammy's once very profitable pachinko business. This part of Sega Sammy was responsible for roughly half of the losses during the period. There is no word whether any specific developers are affected by the job cuts at this point.