The Sega Racing Studio was formed back in 2005 and released just one game, Sega Rally Revo, which was released in 2007 to solid reviews but low sales. Codemasters, which has a history of great rally based racing games, will now allow the over 40 team members of the Sega Racing Studio to work on upcoming Codemasters titles. Financial specifics were not disclosed but presumably the new studio will get a name change.
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