In a dramatic financial turn, Sports Interactive, the acclaimed developer behind the Football Manager series, saw its losses quadruple following the pivotal decision to cancel the release of Football Manager 25.
Financial Fallout from a Bold Decision
Newly filed accounts with Companies House reveal the London-headquartered video game maker posted a pre-tax loss of £8.5 million for the year ending 31 March 2025. This stark figure represents a significant increase from the £2.1 million loss recorded in the previous financial year.
The studio's turnover was also severely impacted, plummeting from £72 million to £47.8 million as a direct consequence of forgoing the annual release. The company defended its controversial move, stating it was a necessary step to refocus on quality. A company spokesperson explained, "While challenging, this step allowed the studio to focus on the quality of the series for future growth, ensuring the long-term sustainability and quality of one of Sega’s most important franchises."
Broader Industry Challenges and Warnings
In a board-signed statement, Sports Interactive commented on the wider video game market, noting signs of recovery in 2025 driven by new hardware like the Nintendo Switch 2 and a robust mobile sector. However, the directors also issued a caution about potential market saturation.
"There are significant large tentpole releases planned in 2025 and 2026, so many in fact that there may be a risk of market saturation," the statement read. "Crowded launch calendars risk diluted marketing impact and shorter engagement windows for mid-tier releases."
The company also highlighted external economic pressures, specifically monitoring the evolving landscape of US trade tariffs. It warned that these tariffs are expected to drive up consumer prices in the United States, potentially affecting the US video games market and introducing further global economic uncertainty.
Restructuring Within the Sega Family
The financial results for Sports Interactive coincide with major restructuring at another Sega-owned studio, The Creative Assembly. The maker of the Total War and Aliens franchises cut 300 jobs, reducing its headcount from 683 to 383 in the year to 31 March 2025.
Despite its turnover falling from £149.2 million to £94.8 million, The Creative Assembly managed a remarkable financial recovery, swinging from a £3.4 million pre-tax loss to a £52.9 million pre-tax profit.
Looking forward, Sports Interactive has released the latest instalment, Football Manager 26, earlier this month, pinning its recovery hopes on the refreshed title. The studio, founded by brothers Oliver and Paul Collyer in 1994 and acquired by Sega in 2006, is betting that its year of sacrifice will pay off in long-term player engagement and commercial success.
