Sega Studios Australia, one of the nation's remaining triple-A game development facilities, has been reduced to what is believed to be a small team after 40 staff were made redundant.
It is not known how many workers remain at the Brisbane studio, though the headcount is expected to be low. Sega said the studio has been restructured for better agility, allowing it develop various digital and download games content.
Those laid off had finished work on the London 2012 Olympics game project; a potentially lucrative release that Sega wants to soar up the charts while the nation is gripped by the Olympics craze.
Sega said those laid off “will help us deliver the highest quality official Olympic video game to date".
The Australia studio will now work on several digital games projects.
"The rise of digital gaming provides an opportunity to align the studio with a rapidly growing market at a time when the games industry is undergoing a significant transition,” Sega claimed.