Sega have announced they are closing down their San Francisco development outfit - Sega Studios San Francisco (formerly known as Secret Level). Since Sega took over the studio their output hasn't exactly been stellar, Golden Axe: Beast Rider and Iron Man, and the second Iron Man title that is set for release soon, will be the final game to come out of the studio.
In statement from Sega it appears as though Sega will focus more on externally developed products in the future, although there is nothing to suggest other internal Sega studios is affected at this time.