Update: CVG.com has reported on Twitter that the rumour is now considered false.
Sega may away from AAA titles to focus exclusively on digital distribution. The move will also see the closure of the company’s European operation.
“On the eve of E3 2012, we are able to inform you, according to our credible sources, that Sega Europe will be finally closed in the coming months as well as all the local branches in Europe like Sega France, This is partly a consequence of the ineffectiveness of Sega’s strategy over the past several years of developing games by western developers.
“At the same time, Sega will also announce, according to these sources, they will no longer develop AAA games on consoles, but will focus on digital games, notably for cell phones and tablets.”
According to the NeoGAF the company’s last major title will be produced by the Creative Assembly, the developers of the Total War franchise. This game will apparently be revealed at E3 over the coming days though no details are given.
After the cancellation of several games in March Sega America announced that “internal functions will be re-structured and this could result in a number of redundancies within the publishing business across the Western organisation.”
It is not yet known how these changes will affect the company’s North American studios however Gearbox’s Aliens: Colonial Marines was recently delayed until February 12 2013.
Sega will not be attending Gamescom, Europe’s largest games convention, in August.