Sega Sammy Holdings has revealed a net loss of YEN 10.8bn, around $119m, for the nine months ending December 31st 2008 – an improvement of around 33 per cent compared the YEN 15.7bn loss seen in the same period in the year before.

Sales for the period were down 15.4 per cent to YEN 309bn. Sega now predicts a $235m loss for its fiscal year ending March.

As a result, the company is to sell off or close 110 of its Japanese arcade centres and look to shed 560 of its total 3,100 global staff. This is to begin via voluntary redundancies commencing from next month.

On top of this a 20 per cent reduction is to be seen in R&D, primarily through a cut in the number of new titles being developed.

A statement from the firm admitted that the Japanese games market has “levelled off”, though it added that demand in Europe and North America remains strong. Credited for their success were new releases such as Football Manager 2009 and Sonic Unleashed, as well as ongoing sales of last year’s Mario & Sonic at the Olympic Games.

In total Sega sold 21m software units in the period – 9.1m in Europe, 8.8m in North America and 3.1m in Japan.