SEGA Racing Studio shuts down

By Ellie Gibson Published 9 April, 2008

Not profitable enough, apparently.

SEGA has confirmed to Eurogamer that its Birmingham-based Racing Studio is closing down as part of plans to restructure development operations in the West.

In a statement the publisher said, "Regrettably SEGA today announced that it is to commence consultation with a view to the unfortunate closure of the SEGA Racing Studio in Birmingham, UK.

"The decision is part of a review of SEGA’s Western Development Studios to ensure that each studio is a profitable entity in its own right, and unfortunately the SEGA Racing Studio’s five year plan would not result in a successful return for the SEGA business moving forward."

The statement concluded, "SEGA would like to stress that there will be no changes within their other internal development studios."

SEGA Racing Studio was responsible for last year's SEGA Rally, which met with critical acclaim - not least from Kristan. It was the only game the studio finished during the three years it was operational.

Picture of Ellie.

About Ellie Gibson

Since joining Eurogamer in the mid 2000s, Ellie has written about subjects as diverse as the fall of Gizmondo, the rise of Hollyoaks actresses in Red Alert games and the noise a bear makes under NSFW circumstances.

Read more articles from Ellie by visiting the Ellie Gibson archive page.

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Comments (52) Latest comment 4 years ago

Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!

  • Inquisitor #1 4 years ago

    Seems a little rash. They are given the chance to make only one (critically acclaimed) game before the decision is made, did they expect miracles?

    I can only imagine the studio was really badly mis managed, why else would you shut down such a promising new studio?

  • bad09 #2 4 years ago

    Shame as Sega Rally was quite good. Maybe it was a flop, did it actually do well in terms of sales? I must admit myself while I enjoyed the demo I didn't pay out for the full game in the end (and I love Sega Rally games).

  • Scurrminator #3 4 years ago

    they also released said game the same day as halo 3

  • NOSAVIOUR #4 4 years ago

    To be that good takes ages. Sega should listen to their own mantra and look at potential long term profits...
    Edited by 1 at 09/04/08 @ 09:23

  • Eldritch #5 4 years ago

    According to VGChartz.com, they sold 60,000 units for 360, 30,000 for PS3 and 20,000 for PSP. Worldwide.

    The Saturn version sold 1.16 million units.

  • Greychapter #6 4 years ago

    I wouldn't say it was "critically acclaimed" though. Its average score on metacritic is mid 70's, though IMO thats a little low as I thought it was good game. Sales were awful though - I even saw it being sold in my local supermarket for £20 brand new last week. In a world of burnout, forza, PGR and GT's you really need to be scoring better on average to be in witha shout.

    Also I think Sega left the Rally franchise doing nothing for too long and a lot of the new wave of gamers didn't have the same familiarity with the brand that would have helped generate sales.

    And when you look at the sales of the McRae series over time they haven't been as big as they were for Colin 2 or 3 so maybe the rally genre isn't as popular any more?

  • Quint2020 #7 4 years ago

    Nooooooooooooooooooooooooooooooooooooooo!

    No current gen outrun then?

  • Eighthours #8 4 years ago

    Shut these guys who produced a good game, and keep open Sonic Team, who produce unmitigated shite year after year? Brilliance.

  • Eldritch #9 4 years ago

    Sonic for Xbox 360 sold 560,000 copies worldwide, so...

  • the_inchworm #10 4 years ago

    It's because they only went and did yet another Sega Rally.

    How hard can it be to figure out that Daytona is Sega's strongest racing franchise, and a successful remake of that game, rolling in all the classic tracks plus a whole lot more for the next gen, would have been the way to go.

    Instead we got (for my money) a bland rally title that did not catch the imagination. Like some others here, I see this as an opportunity missed.

  • Bleedingplums #11 4 years ago

    If there's any decency left in the world they'll do a Sega Rally PS3 rumble patch before they start boxing up their desk ornaments and wall calendars

  • optimusprym8 #12 4 years ago

    no OutRun no Daytona no Scud Race ARGH

  • Quint2020 #13 4 years ago

    In light of this i'll be buying SEGA Rally when i pick up GTA IV (so long as i've finished Conan by then), it is a fantastic game that has been on my "i'll buy it when i get some time" list since it came out.

    This game deserved to do well and so did the studio and i'm sure that people like me didn't help this, they're also based in my native Brum!

    I think SEGA have made the wrong decision on this one.

  • bad09 #14 4 years ago

    I have to agree with Quint 2020 as I was the same, I actually feel bad for not getting it now as it was quite good. It'll be cheap by now anyway so I to think I"ll pick it up very soon.

  • Triggerhappytel #15 4 years ago

    "Shut these guys who produced a good game, and keep open Sonic Team, who produce unmitigated shite year after year? Brilliance."

    Says it all about Sega these days though, eh?

    Of course, had they put the level of marketing into Sega Rally 07 that they did, say, Viking, then it might have been a very different story...

  • BadBoyBonner #16 4 years ago

    How about keeping a drastically cut down team, let them use the engine, and let them bring out Virtua Racing/Daytonna/Scud Racer/Outrun out on Xbox Live and PSN?

    Sounds like a winner to me - I am sure all those that didn't buy Sega Rally who liked it would be tempted to spend £9 quid or so to play these multi-player.

    Unless of course they put them all on one disc - another winner.
    Edited by 1 at 09/04/08 @ 10:11

  • Zander #17 4 years ago

    So is Sega rally dead then? Also is it me or is the racing genre going the way of the dodo?
    Ok so you have your PGR's, Forza's and GT's but it seems like they aren't (racing games) generating the same buzz or profits they used to. Even the previously mentioned titles have had to adapt, adding more and more features and racing modes to keep them going (motorbikes, rallying etc..). Games that provide only one form of racing (as in Sega Rally) are going to struggle compared to these "all-in-one-box" racing games nowadays.

  • anomagnus #18 4 years ago

    jeez, seems like a lot of studios are closing their doors at the moment

  • VeniVidiFlati #19 4 years ago

    @Eldritch - not a personal affront or anything, but those VGChartz figures are complete fabrications. I can assure you that Sega Rally has sold over 110k in the UK alone (across 3 formats). Admittedly not stunning sales, but not terrible either, and a real shame to see another UK Dev closing down

  • sharky_ob #20 4 years ago

    Game over, YEAH......

    Sorry, that was mean.

  • oreillymj #21 4 years ago

    Personally I thought Sega rally was just poor. For an arcade racer, I thought the car handling was quite tricky and the the difficulty level high. But maybe that just me.

    The real pity is that we won't get a next-gen Outrun or (what I'd really like to see) Daytona.
    Edited by 1 at 09/04/08 @ 11:16

  • RobTheBuilder #22 4 years ago

    As about the only person in the UK who bought it on launch day I thought it was good, but it just lacked something.
    Its really sad they weren't given the chance to hone their craft though, as SR showed huge potential in the studio.

  • coojam #23 4 years ago

    They're based in Solihull, not Birmingham. Ignorant Londoners.

    /irony

  • monkie_king #24 4 years ago

    Zander nailed it. Sega Rally was perceived as being too "small", despite the fact it had at least as much content as Motorstorm. This closure looks like Sega is facing up to the new reality, where you can't make focused arcade racers and shift units.

    For me, Sega Rally's main failing was that it ran at 30fps, which is not what arcade racing is about. Just ask Criterion. And the high-concept track-deformation sadly wasn't the killer gameplay feature they'd hoped it to be. It was a solid effort though, and it's a shame we won't be seeing more from them.

  • magicpocket #25 4 years ago

    Lots of people here saying it's a shame there's not going to be a next-gen outrun, but i wonder how many of those people actually bought Outrun on the 'last-gen' of consoles?

    Similar thing for Daytona. If SEGA Rally wasnt a commercial success, what would an arcade game like Daytona offer that SR didnt? 50+ online races? Still 'just' an arcade racer at the end of the day...

  • Darren #26 4 years ago

    Damn shame... SEGA Rally was terrific I thought and I was looking forward to a "reimagined" OutRun and Daytona too but, sadly, that doesn't look like it will happen. :( /cries

  • monkie_king #27 4 years ago

    Yeah, but Daytona has commercial appeal to about 20 million mouth-breathing redneck NASCAR fans who think rallying is some faggy Eurotrash thing.

  • Darren #28 4 years ago

    @MagicPocket - I bought OutRun 2 and OutRun 2: Coast 2 Coast for the Xbox so there! :p

  • monkie_king #29 4 years ago

    They should get Sumo to do Sega Superstars Racing, with bits of Sega Rally, Daytona, Outrun, SCUD Race, Virtua Racing, Sega Touring Car, Super Hang On, Manx TT etc. Nice fast arcadey handling, mixed-class racing, plenty of sunshine and blue skies, shoehorn Sonic and friends in there as Ridge Racer-style car sponsors, guaranteed winner.

  • Les #30 4 years ago

    "It'll be cheap by now anyway so I to think I"ll pick it up very soon."

    That won't really help them anymore, I'm sure you're aware of that... Shame for the people involved but SEGA is a business and needs to make money. If SEGA actually had created some proper Sonic games the last few years, they might have cut them some slack...

  • asharkman #31 4 years ago

    It's a shame alright. But if you compare it to Colin McRae Dirt that sold about 20 times as many games.
    Again according to VGChartz.com

  • bad09 #32 4 years ago

    @ Les

    Yeah I know but it's just a bit of guilt as I did want it, I just always had something else to spend on. Sometimes it's hard being a gamer:)

    Another reason for getting it though is I'm on a bit of a SEGA revival lately with all the good games like S&M Olympics, Superstar Tennis (great fun!), Condemned 2 etc.

    When SEGA make good games it makes me think of my Dreamcast and that makes me feel all warm inside! :)

  • Ryze #33 4 years ago

    Sorry to say, but the commercials for Sega Rally were crap.

    The game is excellent, but lacks presentation and charisma. I've been playing my Saturn versions of Daytona and Sega Rally, and they're full of life - even though they contain less content.

    They sell themselves.

    Sega Rally (Revo) doesn't even show me any car attributes. I was losing rallys time and time again - just due to using the new cars I unlocked.

    Why are there no star ratings for grip, acceleration, top speed, etc?

    Are they expecting me to go googling for info about the cars in their game?

    They should have delayed it and finished the online mode and game presentation, then released it just after or before Chrimbo.

    It was buried by Bioshock, Call of Duty 4 and PGR4.

    STOP RELEASING INCOMPLETE GAMES.

  • Ryze #34 4 years ago

    Sumo should do the other games.

  • AHiFi #35 4 years ago

    @ Sharky - <a href=http://youtube .com/watch?v=tZ7d4JVB2Uc>=D</a>

  • barnard666 #36 4 years ago

    It was a little too hard, but I loved it, and am another person who grabbed it on launch day, even though I was pretty sure it would 19.99 before the week was out! (is the outrun sales are anything to go on)

    I think that the arcade racer is dead, it makes me sad, but people like big serious racers with all that macho bullshit, outrun / SR / daytona are all 10000 times more fun than Gran Turismo, Forza, or even PGR...

    I guess we wont see tornado chaser or what ever it was going to be called, and all I can say about that is...thank god! but any more remakes would have been good...so its pretty sad.
    Edited by 1 at 09/04/08 @ 12:29

  • Darren #37 4 years ago

    @monkie_king - I will never understand this 30 fps vs. 60 fps thing to be honest, especially for racing games. If a game runs smooth and fast then I don't care what the framerate is. Can anyone honestly say that PGR 4 runs or feels slow? If anything, going from the 60 fps GT5 Prologue to the 30 fps PGR 4, the former felt much slower when using the same cars!!! The graphics might update twice as fast in GT5 Prologue but it does little to increase the sense of speed IMO. I think the motion-blurring in PGR4 actually conveys the sense of speed better at 30 fps than the motion-blurless GT5 Prologue does at 60 fps but that's just my opinion. I certainly cannot make control adjustments 30 times per second never mind 60 so it doesn't affect handling for me either. Sure you can see the difference in the update between 30 fps and 60 fps if you flip between them, say, from the 60 fps racing to the 30 fps replay view in Forza 2 or GT5 Prologue but to be honest I have to really look hard to see it. Usually the most obviously difference to me is that the replays look more detailed because the framerate is obviously lower.

    I always remember one idiot - I won't mention his name - who thought only 60 fps racing games where worth playing (and looked good) and that 30 fps ones sucked major balls (and looked ugly). He hated PGR 2 but loved PGR on the Xbox for that reason. The thing was that his favourite racing game was SEGA Rally on the Saturn which he insisted ran at 60 fps when in actual fact it only ran at 25 fps in the PAL version thus disputing his entire 30 fps vs. 60 fps argument in one fell swoop! He never believed the old SEGA Rally ran at 25 fps though and anyone who played the PAL SEGA Rally 2 will know that that game had a wildly flucuating framerate that went between 25 and 50 fps, seeming at random, thus ruining the whole "feel" of the game IMO! LOL

    Returning to the topic on hand though, the new SEGA Rally might have only ran at 30 fps but it felt absolutely fine and as the EG review correctly said at the time (if I remember correctly) it felt like 60 fps because it ran fast and smooth. So does it really matter if racing games don't run at 60 fps? I'd say no because halving it means you can draw twice as much detail per frame. :)

  • GamerAddict #38 4 years ago

    I have to laugh somewhat!! (although not always nice to laugh at people losing jobs) but I know a number of Codemasters employees who left Race Driver and Colin McRae to go work for this Sega studio, sticking 2 fingers up to Codies as they left..........funny how things come round to bite u in the ass!!

  • T4RG4 #39 4 years ago

    Cannot say I'm amazed due to, IMO, Sega Rally being a competent, if plain dull rehash. How can it stand out in a market full of varied, quality games? It just did not cut the mustard. Yes, some people will think it was great but it didnt sell (surely the only reason to close).

    Played the demo for a few minutes and realised it would offer little in terms of entertainment (at full-price).

    Shame for the people that moved there to work for them though, I'd love to work for a racing studio! Not a Sega one though ;)


    Aha, if a lot of Codies people left to work there it explains it all :p

    Edited by 1 at 09/04/08 @ 14:56

  • Ryze #40 4 years ago

    Exactly - that's the selling point.

    How are you going to sell the game to Joe public when the highlight is 'deformable terrain'?

    Needed decent marketing. No games even market the online element properly yet.

    Maybe GT5P has touched on it - but much of joe public doens't understand the whole live online gaming thing.

    Even the game itself doesn't take proper advantage. It's barebones as hell. where are the spectator modes? How can I tell how many people are online playing the game? Again - how can I tell how the car I chose is going to match up to the people I'm racing? No car attributes? What were they thinking?

    WHY IS THE CO-DRIVER'S VOICE AMERICAN?!?!?!?!?

    WHY IS ARCADE/QUICK Race mode so shit?

    Where's the Arcade presentation?

    Did they not consider including the original tracks, voices and game presentation?

    Because they've not replaced it with very much at all.

    Great racing, beautiful game though, but it's like me creating a musical masterpiece then only telling my mum about it.

  • BlueHaze_Sean #41 4 years ago


    Loved the latest version of Sega Rally

    I think the studio nailed it, so it's a shame to see it go due to a lack of commercial success

  • monkie_king #42 4 years ago

    Darren: Well, you present a good argument, but for me the whole point is that a 30fps game inherently does not run "fast and smooth". I think PGR4 just about gets away with it, and the motion blur is very good and helps a lot (nothing like it in GT5, as you say). However, PGR is not an arcade racer in the sense that Sega games are.

    If you played Outrun2 or Burnout3 in 30fps, it would ruin the feel. Super-fast, unrealistic "arcadey" games need the fluidity of running in a frame, it adds a slickness that's simply lost at other framerates. Go back and play a bunch of Dreamcast classics -- Soul Calibur, Power Stone, HOTD2, DOA2, Crazy Taxi, Virtua Tennis. They're all silky-smooth arcade conversions. Then play the rush-job Dreamcast Sega Rally2 and immediately it feels like it doesn't belong.

    More recently you've got things like Ninja Gaiden, God of War, Burnout Paradise, Forza2, ExciteTruck and CoD4 all sacrificing greater graphical fidelity for the framerate. Why would developers make that trade-off if it didn't make a difference? Personally I was considering new Sega Rally until I played the demo, and it was instantly a case of, "Oh, this isn't right".

  • Ryze #43 4 years ago

    @monkie_king

    I understand what you're saying, but it doesn't ruin a great game, I'm afraid.

    It's just something that's desirable where 3D graphics are concerned.

    The same will happen next gen - where they decide whether they go for 1080p 30fps with tonnes of detail and effects and graphics like Beowulf, or 1080p 60fps with much less detail.

    Depends on the game in question - and many driving games will go for the detail. GT5 is suffering due to the high benchmark they set. It's taking bloody ages to optimise, and still tears up in detailed places.

    edit: Beowulf
    Edited by 1 at 09/04/08 @ 18:12

  • db3 #44 4 years ago

    Sorry, not surprised, thought Rally was very disappointing.
    Edited by 1 at 09/04/08 @ 18:46

  • Fatnick #45 4 years ago

    "No current gen outrun then?"

    I would have hoped that any next-gen Outrun action would have been tossed Sumo's way.

  • Darren #46 4 years ago

    @monkie_king - I'm curious... how do you *know* that OutRun 2 and Burnout 3 would be ruined at 30 fps considering we've only had the chance to play them at 60 fps? :p

    Unless you compare games that were 30 fps and are now 60 fps (or vice versa) you cannot really know. The only two franchises that I know of that you can form a basis for your argument are PGR and Forza Motorsports. The first PGR on the Xbox ran at 60 fps but the others have been 30 fps, and Forza 2 was improved to 60 fps over the 30 fps of its Xbox predecessor; to me neither feels faster or slower than the other because of the change in framerate. I guess it all boils down to perception and as I admitted before I struggle to discern the difference between 30 and 60 fps, especially when developers use tricks like motion-blurring.

    Going back to SEGA Rally, I wouldn't have know it ran at 30 fps had EG not made a mistake in the review of claiming it was 60 fps only for people in the comments box correct the reviewer. It feels fast, smooth and fluid to me and the controls were responsive and accurate plus it looked pretty so I have no complaints. Had the game ran at 60 fps it wouldn't have looked as good so I think the developers made a wise choice, not that it would have made any difference anyway as the game still wouldn't have sold very well. Sadly.

  • krudster #47 4 years ago

    Commenting on how you felt about playing a game demo six months ago is about as useful as me passing judgement on hearing a few minutes of an album once. I really don't get why people waste their time doing so :)

    In simple terms, Sega Rally was a fantastic game if you gave it a chance, as many have observed here. At first it doesn't seem that amazing, which is its main failing. It didn't hook enough people from the off. But, as a confirmed arcade racing whore, I swear this is one of the purest titles in the genre in the past ten years, and up there with Burnout 2 in terms of quality. If you give it a chance. Sadly, with so many great games out there, few people are willing to give many new things a try.

    I think it's a real shame the studio closed down, because they really were onto something. But the talent will be back elsewhere, so it's not all bad news. Maybe SUMO can hire the best of the mob and get them working on other cool stuff.

    Sega should have also known better than to release a game like that when it did. That sort of business decision is, frankly, barmy. Also, maybe it was a little naive to imagine Sega Rally was a brand anyone cared about anymore - the last one on Dreamcast bombed as well, and in real terms hardly anyone actually bought the Saturn one everyone bangs on about. The installed base of Saturn was absolutely piddly - I do have the official UK figures somewhere, and it was pretty shockingly low by today's standard. 12, 13 years back, the sales of the 2007 Sega Rally would have been probably the best selling game of the entire year, now 120, 000 or so is considered a flop. How times have changed!




  • Ryze #48 4 years ago

    Yup. They should have taken another few months and fleshed out the online and arcade components of the game.

    The commercials should have shown the recreation of teh arcade experience online, with a spectator mode that lets you challenge other racers and jump in and out of games.

    There should be more of a social element to these arcade conversions, and the portable game should have tied in with this experience more closely.

    Does teh PSP game even link with the others in any way? I don't think it does, but it could have increased the value of teh PS3 game by linking in ala Outrun 2006 PSP/PS2, only using WiFi instead.

    The bar has been raised, and this game didn't cut it at retail. It could have even been an XBLA / PSN download with DLC - being packaged with only 3-4 tracks like the arcade original. Buy the rest separately, after a cheap as hell main game.

    Is it only me that thinks of all this stuff?

    My Sega Rally EG group should have been unnecessary - the game and it's website should have done the job alone - the same with Outrun 2006.

    What will it take for them to wake up?

    What type of role should I be approaching these game companies looking for, that I can help make this shit happen sometime this gen?

  • Les #49 4 years ago

    "I thought the deformable terrain was the most interesting innovation in a racing game for years."

    Were it not for the fact that MotorStorm already introduced it 6 months or so before...

  • Quak #50 4 years ago

    It's taken Sega 10 years to realise that the Sonic game people want is a 2.5D game with the gameplay of the past. None of this "Silver can move shit with his mind", "Sonic is friends with humans" shit that we've had in recent games.

    It needs to be at least another 5 years before Sega realise that a 40-player Daytona USA (complete with arcade-perfect mode and next-gen mode with new visuals, new tracks etc.) would RULE the gaming charts.

  • Ryze #51 4 years ago

    SEGA have been getting on my fucking nerves the past few years to be honest.

  • SpyroViper #52 4 years ago

    In All honesty.. SEGA rally was'nt all that good anyway. It had some Technical achievements, like the Tires digging into the ground and it had good use of AA and Lighting. But really, the handling was horrible, the commentators were anoying and the tracks were boring and dull.. I'm not even going to mention the framerate, which was supposed to be 60, changed to 30 and floats around 25..

    IMO glad to hear it, pave way for more experienced developers. *wishes Polyphony Digital came to UK*