Sega has announced that starting July 1st, seven of its nine development studios will be integrated into the company in an attempt to efficiently re-allocate research and development resources, focus human resources on major titles, develop a flexible sales strategy and strengthen the power of its brands. The seven development studios are Sega AM2, Sega WOW, Sonic Team, Amusement Vision, Hitmaker, Smilebit and Digital Rex.

This decision is part of a larger move which will see Sega and its largest shareholder Sammy merge into a new company called Sega Sammy Holdings on October 1st. The exchange ratio has been fixed at one Sammy share for 0.28 Sega share. Until March 2007, the new company plans to re-organize its Pachinko and Pachislot-related operations by creating a new wholly-owned subsidary. The chairman and president of Sega Sammy Holdings will be Sammy founder and president and Sega chairman Hajime Satomi. Sega president Hisao Oguchi will become vice president. Priorities will remain the same though, with the Sammy part continuing its focus on the Pachinko business, and the Sega part focusing on arcade and consumer-related business.

Earlier today, Sega revealed that its vice chairman and former president Hideki Satou as well as directors Tetsu Kayama, Akira Nagai and Hisashi Suzuki are all set to retire.

• Reuters