Sega is suffering the same problem they have suffered for the past twenty-five years. The company has an identity crisis. It's really always been the companies downfall. Back in the 90s the company wrestled internally whether it was primarily an arcade company or a console company. Whether it was primarily a Japanese company or an international one. As time has gone on the identity crisis persisted just with different identities. Today people don't really recognize Sega as primarily an arcade or console company, at least int he same context. However, Sega does currently have three different identities it is juggling.
The first is its Western focused identity that focuses on publishing games like Company of Heroes and Alien games. The second is the traditional Sega known for the classic franchises like Streets of Rage, House of the Dead, Jet Set Radio, and of course Sonic. They even once in a while release new games that fall in the same vein of this such as Valkyria Chronicles and Yakuza. The third identity, and the most hated, is the mobile and F2P Sega most notable for games like Spiral Knights and Chain Chronicles.
Now I'm not saying having different identities for a company is bad. In fact it is very good and necessary to survive as a successful company. Nintendo for example had extraordinary success last generation balancing the identity of traditional "hardcore" Nintendo with games like Zelda and Metroid with the then new casual friendly Nintendo with Wii Sports and Brain Age. There are many other examples but I don't want to make this post too long.
Basically while other large gaming companies have found a healthy balance of their identities Sega has not. Let's start with the most obvious, traditional Sega. First off, so many of their games STILL haven't been released. Panzer Dragoon, Shenmue, and Skies of Arcadia have not seen a release on PC, PS4, Xbone, and/or Wii U. This would be understandable if their previous classics they released on these systems flopped, it would make sense. However, this hasn't happened at all. The Dreamcast Bundle always seems to sell well on Steam and Humblestore, and Jet Set Radio HD was successful. Even the recently released Valkyria Chronicles, a series that essentially flopped twice when given to North America (the first game on PS3, and the second game on PSP) is doing exceptionally well. So what's stopping Shenmue from being released on PC or even more recent games like Yakuza? Hell classic JRPGs seem to be "in" right now with PC gaming as Final Fanstasy games have been selling pretty well on the platform. Where is Skies of Arcadia? There is a reason why HD remasters are the latest craze, they are incredibly easy money. By not putting these games on modern systems.
What this also shows is that there is still demand for the traditional Sega games. Yet despite this what traditional Sega games are in development? I mean all I can think of recently is Phantasy Star Online 2 and that isn't even in English yet and may never be. People would argue that the amount of people who would pay $60 for a modern Jet Set Radio wouldn't warrent the $40 million it would take to develop. However, Nintendo has shown that you don't have to spend tens of millions to make modern classic style game that can sell well, and Sega should take note.
When it comes to the Western identity, well they are trying and doing better. They purchased Relic who is doing good work and Alien Isolation was a win for them.Football Manager and Total War continues to impress. However they should diverse the developers they have a bit. It seems a bit too RTS heavy. As for their F2P games, well this is uncharted territory with huge potential profits. It may piss some people here off, but the reality is that these games help fund their other ventures. I'm going to be honest, I'm not as familiar with this side of Sega so it's hard to comment.
Overall, I can't really say for certain what they have to do to succeed. All I can say is more focus and just common sense. I mean if you are going to release your classic games on digital services, then release them. It's insane that while even most of Square-Enix's games are available on modern platforms Sega is still lagging. Also a bit more common sense is needed in the company. As much as people, including I, love Platinum Games...their games just don't sell. There was no reason to give that studio multiple trys before accepting that they don't make profitable games. Phantasy Star Online 2 must have been very expensive to create, so why leave it in Japan? I know it has a lot of text and that is expensive to translate, but why would you make a game with such a sizable cost and only leave it in a country where MMOs aren't that popular? That makes no sense.
Again, I'm not sure the best way for Sega to balance their output as I don't have access to the costs, sales, and profits to each individual game , but I feel that they certainly can do better.