Ellie Gibson 09:34 (BST)
04/04/2006

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SEGA has acquired San Francisco developer Secret Level as part of plans to focus more on its Western strategy and set up a new internal development arm in North America.

Secret Level, which was founded in 1999, is best known for developing Karaoke Revolution, Magic: Battlegrounds and America's Army: Rise of a Soldier. Last July, the studio signed an agreement to "recreate a classic SEGA franchise" for Xbox 360 and PlayStation 3.

Now SEGA has officially acquired the studio in a new deal, the terms of which were not disclosed, and established it as a new subsidiary. SEGA America president Simon Jeffery commented: "We looked long and hard at building an internal studio from scratch, but were so impressed with the team at Secret Level and their next-gen technology that we decided to create our internal development infrastructure through a direct acquisition, one that could fulfill our dynamic growth plans and produce high quality games."

Naoya Tsurumi, CEO of SEGA America and SEGA Europe, added: "In recent years, SEGA has rebalanced its development strategy to be more Western focused. The addition of this development powerhouse further moves SEGA toward its goal of becoming a leading next-generation publisher."

Secret Level president Jeremy Gordon also welcomed the deal, stating: "SEGAâs incredible library of IP and global publishing muscle will enable us to realise our full technical and creative potential."

The move comes as SEGA also announces the acquisition of Sports Interactive, the UK studio behind the Football Manager series. The new deals come just a year after SEGA acquired Total War developer Creative Assembly.