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.