Sega have confirmed that they will be shedding 560 staff members and closing 110 Japanese arcade centres due to big losses in the latter stages of 2008.

The news, picked up by Kotaku, comes as Sammy Holdings released its financial statement for the nine month period, illustrating loss of USD 119 million.

Although the firm has conceded the Japanese market has "levelled off", there still appears to be optimism about demand in and North America.

The total figures for the period show 3.1 million units sold in Japan, with 8.8 and 9.1 million sold in North America and Europe respectively.

By James Wallis