disolitude, while HD gaming isn't by default devastating, it is a huge risk. When you gamble big, you stand to lose big, and many devs are putting all of their eggs in one basket. Maybe they were hurt by the bad economy, it would still have been less so on SD games than HD. No way around it. Maybe they were hurt by making bad games, but this is more pronounced a loss on HD games than SD. So on and so forth.

And obviously there is a reason they lost all of that money, or they wouldn't have done it. Even if it's from R&D on next year's games that's no excuse, since that is the case every single year. They had 2008 R&D costs in 2007, after all, and companies that are successful post profits even when they have dozens of games in development (Nintendo). The fact is, Sega sucked badly last year and lost a ton of money. There's no excuse for that, especially if you're an investor. If you had money in Sega, you wouldn't accept "we're preparing for next year" as an excuse for this year's failure.

Also, I'd have to say the entire history of Sega shows they are stupid and like to lose their money. Not even when they were on top of the world with the Genesis were they able to consistently profit. Now that their games have to sit on the same shelves as much better products people realize they produce crap, and if they want to ever be profitable they should just stick to making what sells with the occasional foray into buying successful studios.

@ChichiriMuyo

thats the thing tho...Sega sucked on a few occasions last year but they weren't punished for it. Ironman sold a ton...Hulk did well...Sonic unleashed critically flopped (I liked it tho) and it sold well. Sure golden axe flopped and it sucked...but rest of their titles were pretty good.

-V Chronicles didn't get the 10th of the sales it deserved
-Condemned 2 should be a multi million seller
-Sega Rally Revo 2 years ago was one of the best rally racing gmaes ever and it sold nothing.

Problem with sega is that they have a history of making great games that no one wants to buy.

I wouldn't be surprised if they made another Panzer Dragoon or Jet grind radio and it got outsold by Shadow the Hedgehog 2.

A million units hardly counts as a ton in my book. Frankly, when Namco said it takes 500k sales to turn a proft on HD consoles I'm pretty sure they meant at a bare minimum and that most games still won't even profit at that level. Reports posted here (can't remember off the top of my head when/where) have people that suggest 80% of games released fail to make a profit, and Sega is certainly no exception to the rule. Yeah, they make decent games no one wants to play and sell tons of their crappy games, but maybe that should be a sign to them. They put tons of money into untested waters and make games that don't have a clearly defined and populous target audience. For that, they lose tons of money. Again, to an investor there's just no excuse for this when it's already been shown that currency exchange only makes at most 20% of those loses.

Woah mate, you got completely the wrong idea about what I was saying. I was claiming that the expenses of publishing games such as The Conduit, MadWorld, Sonic ATBK and House of the Dead: Overkill - all of which are likely expensive games - could be causing profits for 2008 to drop while their returns won't be seen till 2009. I just thought it seemed like they had put a larger investment into the Wii for 2009 than they normally did.

You are correct.  Only 20% of released games make a profit.  If you include projects that get started but are never released, then only 4% of games are profitable.

http://www.gamedaily.com/articles/news/only-four-percent-of-video-games-make-a-profit-ndash-eedar-/?biz=1