Sega has reported significant losses at the end of its current fiscal quarter.
The firm reported a deficit of £17 million for the period ending 30th June, compared to a profit of £55.4 million for the same period in 2010.
Holding company Sega Sammy saw its net sales drop 28.5% to £514.9 million, while its gaming division was hit by a downturn of 22.3% to £127.7 million.
Sega attributed the losses to settlement payments for patent licensing, as well as the poor sales of its software outside of Japan.
The studio’s major releases during the quarter included Virtua Tennis 4 and Thor: God Of Thunder, as well as the Japan-exclusive Yakuza: Of The End. Although sales were steady in the Asian market, they were slow overseas.
Sega concluded that it must “adapt to changing business environments” and work on “new content geared to social networking service and smartphone”.