Unconfirmed reports today suggest that U-GA, the talented SEGA development team behind the likes of ‘Space Channel 5’ and more importantly ‘REZ’, has been closed and will cease functioning as of today.

If true it’s likely that U-GA has been absorbed into Sonic Team, as suggested by an earlier announcement and in team-leader <a href=http://www.u-ga.com/jp/diary/diary.php?HID_DIARY_KIND=diary_mizuguchi>Mizuguchi-san recent diary update</a>.

If true, the news of two of SEGA’ finest developers forming into one team certainly should please the SEGA fans out there and lead to the creation of some truly exceptional games; however it saddens us personally to see the passing of such an innovative developer and presumably the chances of ever seeing a sequel to ‘REZ’.

It’s been heavily rumoured that U-GA were in the midst of announcing a new title, which we believe is where this screen was taken from, however it’s currently unclear, if true, as to whether this game will be completed after the merger.

We’ll have more details soon.