SEGA has shut down its unsuccessful online game division in China's mainland, the Japan-based game firm said yesterday.
The Sega online game sector, based in Shanghai, officially disbanded yesterday afternoon, two sources told Shanghai Daily.
"Sega is not familiar with the Chinese online game market and it has decided to shrink the business," the company said through its public relations agency, Blue Focus.
Sega's other mainland businesses, such as game consoles and a game park in a shopping mall in Nanjing Road, won't be influenced, the company said.
The three online games did not take off with Chinese mainlanders and the average peak concurrent user base was less than 1,000, sources said, who requested anonymity.
The mainland's total online market revenue was 7.13 billion yuan (US$929 million) in 2006, 27 percent growth year on year.
The market share is dominated by homegrown firms like Shanda, NetEase and The9, according to Analysys International, a Beijing-based IT consulting firm.
"The market is complicated and fiercely competitive," said Hou Tao, an analyst at iResearch Inc. "Foreign firms are strong in game design but the domestic firms have more experience in operations."
Electronic Arts, the United States-based game vendor, combined with Shanghai-based The9 to operate well-known soccer game FIFA Online in China's mainland.
Sega is a strong company for games on the console platform, such as the Sakura War series, but it hasn't been successful in transferring the games to the online arena.