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Sega buys S.F.-based indie game developer

With its eye on Western next-gen gamers, the Japanese publisher pays $15 million for Secret Level.

Sega Holdings of USA announced on Monday that it has purchased independent game studio Secret Level for $15 million.

Last July, Sega announced a next-generation development deal with Secret Level, an arrangement that asked the San Francisco-based shop to "re-create a classic Sega franchise" on the Xbox 360 and PlayStation 3. Though the unnamed game in question isn't "Sonic the Hedgehog"--which is being shepherded into the next generation internally--the prospect of a next-gen "Altered Beast" or "Golden Axe" has many players excited.

Prior to its next-gen project, Secret Level was best-known for developing "Karaoke Revolution," "Magic the Gathering: Battlegrounds" and console versions of the military title "America's Army: Rise of a Soldier."

Sega Holdings, the U.S.-based arm of Japan's Sega Sammy Holdings, said the acquisition of Secret Level was part of its push to concentrate on the U.S. and European video game markets.

"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," said Simon Jeffery, Sega of America's president and COO.

The deal comes just more than a year after Sega acquired The Creative Assembly, makers of the highly acclaimed "Total War PC" strategy series and the not-so-highly acclaimed "Spartan: Total Warrior" for consoles. It also comes two weeks after Sega said it will "collaboratively develop" an all-new role-playing game with "NeverWinter Nights 2" developer Obsidian Entertainment for the PC, PlayStation 3 and Xbox 360.

Tor Thorsen reported for GameSpot.