Sega West has made 73 staff redundant across its San Francisco and London offices.
36 employees have been lost in the US, with a further 37 going at the firm's European operation - around 15 per cent and ten per cent of each HQ's respective workforces.
Sega said today it made the "reluctant decision" to put more emphasis on the growing digital sector.
The firm's San Francisco office will now act as its digital HQ.
Sega's flagship UK office - which mainly operates in the traditional boxed games sector - is based in the London borough of Brentford.
"We've been going through the planning process the past six months, taking a look at the future of the market and where we think our investments need to be," Sega West president Mike Hayes told IndustryGamers today.
"It's no surprise that the share of digital is growing as an overall part of the video game business, so we decided we have to invest more in that specific area," Hayes explained. "And notably, we had to get our business groups appropriately sorted to provide the right focus.
"Traditionally, Sega of America and Sega Europe had been running a dual company where both would look at traditional goods and both would look at the digital side. What we decided to do is to make San Francisco the kind of hub for our digital efforts, and therefore make London the hub for the traditional packaged goods part. I would stress, however, that this is very much administrative reorganization, because clearly we want to be very successful with digital globally.
"Likewise, we want to continue to be successful with traditional goods. So the reorganization allows us to be much more efficient in terms of our costs, but probably more importantly in the way that we can look at the future business."
I would have to admit that as a collector I find the emphasis on downloadable games disheartening. I will always see greater value in a boxed product and I have steered away from some online only games because I see little value in them after the initial play through.
Boxed games are good and look cool in a collection but how much space do you have for all of this stuff.
With ubisoft ditching manuals no doubt others will follow to save the environment (money) and maximize profit the next step inevitable would be to get rid of boxed products all together.
Although I cant see a big publisher going this way just yet as they will end up losing more money than they will make by cutting off a large section of their consumer base, they may reduce the amount of boxed copies produced and pushing the RRP up for people that dont want to buy games ditially or just want a box for their collection forcing them to make a choice between saving money or having a box to look at.
I can only see a smaller publisher/developer with a niche market getting away with going all digital at the moment as they could end up making more money selling direct then taking the risk of being lost in the pile of big franchise titles and marking hype
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i like boxed games
