In a statement released to investors, Sega Sammy warned that it’s expecting “extraordinary” losses for the company’s fiscal year, which ends tomorrow, which it blames on poor game sales in the U.S. and Europe.

Sega is expecting losses for the fiscal year to reach upwards of 7.1 billion yen ($86.5 million). In light of this, the company says that it plans to “streamline” its operations in the U.S. and Europe, which essentially means that Sega is aiming to make the company smaller, and focus only on its core franchises: Sonic, Total War and Aliens.

This also means that a number of layoffs are expected in several of Sega’s branches, and the company confirmed that its move to restructure the business means that several of its games have and/or will be canceled.

“We conducted detailed reviews of earnings projections for titles targeted toward the U.S. and European markets and decided to narrow down sales titles from the following period and after to strong IPs, such as “Sonic the Hedgehog,”, “Football Manager”, “Total War” and “Aliens” which are expected to continue posting solid earnings,” the statement says in part. “In accordance with this, we are canceling the development of some game software titles.”

Sega continued: “The changes will position SEGA as a content led organisation, maximising sales with a strong and balanced IP portfolio across both packaged and digital distribution. The management team are confident that the proposed restructure will benefit the company and make it fit for purpose within the changing nature of the industry over the coming years.”

Source: Sega