Although things appeared to be different, Sega was not recession-proof either and some really harsh measures will follow, according to Sega’s Japanese branch: 110 arcades will be closed, a number of games will be canceled and 18 percent of Sega’s staff will be fired. The company said that these cost-cutting moves come in anticipation of its recording an annual loss of 25 billion yen (about $238 million) during the fiscal year that will end March 31.

It appears however that Sega only has problems with their Arcade branch: the company owns and operates 450 arcades in Japan and it appears they no longer pay off, since they’ll reduce the number to 340. Still, the publishers don’t have too much hope that the Arcade business will become a profitable one in the coming fiscal year, and that’s understandable.

Also, it appears that Sega plans to develop more games internally in order to increase their profits and they will also solicit “voluntary retirement” of no less than 560 of their 3,127 employees. It is also reported that Sega’s North American branch had to lay off 30 employees recently.