There was a time when the word “Nintendo” was synonymous with console video games. Literally, in that you’d hear parents say things like “Stop playing Nintendo and do your homework,” to their kids.

Rival video game company Sega put an end to that, though. Its Master System was the first post-NES console to have any sort of impact, limited as it was. More impressively, its Mega Drive/Genesis was the first 16-bit video game system, and for a period was actually the leading console in the North American market.

Sega’s tumultuous history with the console video game industry looks to be heading into its final chapter, though. Not only has the company been out of the hardware business for over a decade, Sega has announced that console software will no longer be the core element of its operations.

Sega Sammy Holdings, Sega’s corporate parent, recently announced its plans for widespread structural reform. Most dramatically, the company says it will be transitioning away from console software. Instead, Sega will be channeling its efforts into creating titles for mobile platforms, assumed to be smartphones, as well as online PC games.

The shift in focus to small screen and multiplayer titles is likely the final nail in the coffin for the hopes of continuations to grand, sweeping, single-player games such as Skies of Arcadia and Panzer Dragoon.

▼ As well as the crossover between the two titles that we just now imagined, desperately want, and realize will never happen.

Fans of those series are no doubt saddened by the news, but probably not as much as the 300-some employees Sega Sammy Holdings is looking to downsize as it looks for volunteers willing to leave the company before the scheduled end of their contracts. Roughly 120 of those workers are expected to come from within Sega itself, and Sega Sammy Holdings has also mentioned the possibility of other future staff size “adjustments.”

Given that Sega had approximately 2,200 employees in the 2013 fiscal year, the workforce reduction amounts to only about five percent. Still, it’s yet another episode of Sega’s business course being buffeted by market trends. After finding unprecedented success with the Genesis in America and Mega Drive in Europe, the system’s CD add-on didn’t bring in a significant amount of revenue or remarkably expand the system’s user base. Sega also stumbled in stepping up to the next generation when it failed to predict how polygonal graphics would transform and conquer the video game market, as its Saturn console was woefully underpowered in the 3-D graphic style compared to Sony’s PlayStation and the Nintendo 64.

Sega’s last gasp at console hardware came in 1998, with the release of its final system, the Dreamcast. Despite an attractively low launch price the system never managed to build much more than a cult following, and just three years later, in 2001, Sega was out of the console-making business.

▼ Somehow, games like the Dreamcast’s Seaman never caught on with the mainstream, even with Sega’s advertising that featured visual references to human/fish lovemaking.

The company quickly shifted gears and began producing and publishing titles for systems from former arch-rivals Sony and Nintendo, as well as relative console newcomer Microsoft. Still, Sega has never quite been able to get back in the money-making groove it had through the late 1980s and early ‘90s. After being acquired by pachinko machine manufacturer and occasional video game dabbler Sammy in 2004, about 400 Sega employees were laid off between 2008 and 2009.

In light of Sega Sammy Holding’s reevaluation of its position and market trends, the company feels it can be more successful by concentrating what it calls the “growth sectors” of mobile and PC online games. There have even been signs of this transition, with recent mobile releases of games in some of Sega’s best-loved franchises, such as Crazy Taxi, Super Monkey Ball, and Sonic the Hedgehog.

▼ Actually, does anyone still love Sonic after the Wii U and 3DS Sonic Boom?

The restructuring will also affect Sega of America. The U.S.-based subsidiary will be closing its expensive San Francisco office and relocating its headquarters to southern California. So if nothing else, Sega employees who manage to hold on to their jobs be able to field test playing the developer’s new smartphone games while sitting on the beach.

Sources: Wired Japan via Alfalfalfa

Top image: Softpedia

Insert images: Nat by Nature, Wikipedia/Dashbot (edited by RocketNews24), Venturebeat, Sonic the Hedgehog Official Website