Sega's UK-based Racing Studio has been closed, Develop understands.
According to a former staff member from the studio, the Solihull-based outfit has shut down effective immediately.
Sega Racing Studio had so far developed just one game, its PS3/360 and PC remake of Sega Rally. Released in September 2007, the game debuted to fairly good reviews (with an average score around 75 according to Metacritic), but less stellar sales.
The studio was founded in 2005 to help Sega establish a racing game team that drew on the UK development sector's heritage in the genre. Former Codemasters man Guy Wilday was picked to run the studio which in time grew to include over 60 staff working on multiple projects, including the Rally remake and purported new racing IP.
And it's not yet clear if the staff at the studio are being made redundant or offered the chance to move to one of Sega's other UK studios (The Creative Assembly and Sports Interactive) or what the fate of the games still in development may be.
(Of course, those racing specialists at the studio probably won't find it hard to get work at other studios. The UK is filled with racing teams, such as Codemasters, Black Rock, Bizarre Creations, Eutechnyx, Evolution, Reflections, Sony Liverpool and Criterion.)
Sega's reasoning for the closure is not yet known. Reps from Sega UK had not returned our call for comment at the time of publication.
[UPDATE: A report on Next-Gen confirms the news, with a Sega Europe statement reading: "Regrettably Sega today announced that it is to commence consultation regarding 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 5 year plan would not result in a successful return for the Sega business moving forward. Sega would like to stress that there will be no changes within their other internal development studios."]