diff --git a/src/types/outputFactory.ts b/src/types/outputFactory.ts
index 903cf71b4..70629af73 100644
--- a/src/types/outputFactory.ts
+++ b/src/types/outputFactory.ts
@@ -101,8 +101,6 @@ export default class OutputFactory {
     romBasename?: string,
     romBasenames?: string[],
   ): string {
-    const romNameSanitized = romBasename?.replace(/[\\/]/g, '_');
-
     let output = options.getOutput();
 
     // Replace all {token}s in the output path
@@ -112,7 +110,7 @@ export default class OutputFactory {
       inputFile?.getFilePath(),
       game,
       release,
-      romNameSanitized,
+      romBasename,
     ));
 
     if (options.getDirMirror() && inputFile?.getFilePath()) {
@@ -131,18 +129,11 @@ export default class OutputFactory {
       output = path.join(output, dat.getDescription() as string);
     }
 
-    const dirLetter = this.getDirLetterParsed(options, romNameSanitized, romBasenames);
+    const dirLetter = this.getDirLetterParsed(options, romBasename, romBasenames);
     if (dirLetter) {
       output = path.join(output, dirLetter);
     }
 
-    if (game
-        && game.getRoms().length > 1
-        && (!romNameSanitized || !FileFactory.isArchive(romNameSanitized))
-    ) {
-      output = path.join(output, game.getName());
-    }
-
     return fsPoly.makeLegal(output);
   }
 
@@ -277,24 +268,38 @@ export default class OutputFactory {
 
     // Split the letter directories, if needed
     if (options.getDirLetterLimit()) {
-      lettersToFilenames = [...lettersToFilenames.entries()].reduce((map, [letter, filenames]) => {
-        if (filenames.length <= options.getDirLetterLimit()) {
-          map.set(letter, filenames);
-          return map;
-        }
-
-        const uniqueFilenames = filenames
-          .sort()
-          .filter((val, idx, vals) => vals.indexOf(val) === idx);
-        const chunkSize = options.getDirLetterLimit();
-        for (let i = 0; i < uniqueFilenames.length; i += chunkSize) {
-          const newLetter = `${letter}${i / chunkSize + 1}`;
-          const chunk = uniqueFilenames.slice(i, i + chunkSize);
-          map.set(newLetter, chunk);
-        }
-
-        return map;
-      }, new Map<string, string[]>());
+      lettersToFilenames = [...lettersToFilenames.entries()]
+        .reduce((lettersMap, [letter, filenames]) => {
+          if (filenames.length <= options.getDirLetterLimit()) {
+            lettersMap.set(letter, filenames);
+            return lettersMap;
+          }
+
+          // ROMs may have been grouped together into a subdirectory. For example, when a game has
+          // multiple ROMs, they get grouped by their game name. Therefore, we have to understand
+          // what the "sub-path" should be within the letter directory: the dirname if the ROM has a
+          // subdir, or just the ROM's basename otherwise.
+          const subPathsToFilenames = filenames
+            .filter((val, idx, vals) => vals.indexOf(val) === idx)
+            .reduce((subPathMap, filename) => {
+              const subPath = filename.replace(/[\\/].+$/, '');
+              subPathMap.set(subPath, [...subPathMap.get(subPath) ?? [], filename]);
+              return subPathMap;
+            }, new Map<string, string[]>());
+
+          const subPaths = [...subPathsToFilenames.keys()].sort();
+          const chunkSize = options.getDirLetterLimit();
+          for (let i = 0; i < subPaths.length; i += chunkSize) {
+            const chunk = subPaths
+              .slice(i, i + chunkSize)
+              .flatMap((subPath) => subPathsToFilenames.get(subPath) ?? []);
+
+            const newLetter = `${letter}${i / chunkSize + 1}`;
+            lettersMap.set(newLetter, chunk);
+          }
+
+          return lettersMap;
+        }, new Map<string, string[]>());
     }
 
     const foundEntry = [...lettersToFilenames.entries()]
@@ -315,17 +320,27 @@ export default class OutputFactory {
     rom: ROM,
     inputFile: File,
   ): string {
-    const { dir, name } = path.parse(this.getOutputFileBasename(
+    const { dir, name, ext } = path.parse(this.getOutputFileBasename(
       options,
       dat,
       game,
       rom,
       inputFile,
     ));
-    if (dir.trim() === '') {
-      return name;
+
+    let output = name;
+    if (dir.trim() !== '') {
+      output = path.join(dir, output);
+    }
+
+    if (game
+      && game.getRoms().length > 1
+      && !FileFactory.isArchive(ext)
+    ) {
+      output = path.join(game.getName(), output);
     }
-    return path.join(dir, name);
+
+    return output;
   }
 
   private static getExt(options: Options, dat: DAT, game: Game, rom: ROM, inputFile: File): string {
@@ -363,7 +378,12 @@ export default class OutputFactory {
   }
 
   private static getRomBasename(options: Options, dat: DAT, rom: ROM, inputFile: File): string {
-    const { base, ...parsedRomPath } = path.parse(rom.getName());
+    let romNameSanitized = rom.getName();
+    if (!dat.getRomNamesContainDirectories()) {
+      romNameSanitized = romNameSanitized?.replace(/[\\/]/g, '_');
+    }
+
+    const { base, ...parsedRomPath } = path.parse(romNameSanitized);
 
     // Alter the output extension of the file
     const fileHeader = inputFile.getFileHeader();
diff --git a/test/modules/candidatePostProcessor.test.ts b/test/modules/candidatePostProcessor.test.ts
index 585539794..02d7a2363 100644
--- a/test/modules/candidatePostProcessor.test.ts
+++ b/test/modules/candidatePostProcessor.test.ts
@@ -11,7 +11,7 @@ import ReleaseCandidate from '../../src/types/releaseCandidate.js';
 import ROMWithFiles from '../../src/types/romWithFiles.js';
 import ProgressBarFake from '../console/progressBarFake.js';
 
-const games = [
+const singleRomGames = [
   'Admirable',
   'Adorable',
   'Adventurous',
@@ -19,13 +19,31 @@ const games = [
   'Awesome',
   'Best',
   'Brilliant',
+].map((name) => new Game({
+  name,
+  rom: new ROM(`${name}.rom`, 0, '00000000'),
+}));
+const subDirRomGames = [
   'Cheerful',
   'Confident',
   'Cool',
 ].map((name) => new Game({
   name,
-  rom: new ROM(`${name}.rom`, 0, '00000000'),
+  rom: new ROM(`disk1\\${name}.rom`, 0, '00000000'),
+}));
+const multiRomGames = [
+  'Dainty',
+  'Daring',
+  'Dazzling',
+  'Dedicated',
+].map((name) => new Game({
+  name,
+  rom: [
+    new ROM(`${name}.cue`, 0, '00000000'),
+    new ROM(`${name} (Track 01).bin`, 0, '00000000'),
+  ],
 }));
+const games = [...singleRomGames, ...subDirRomGames, ...multiRomGames];
 const dat = new DAT(new Header(), games);
 
 async function runCandidatePostProcessor(
@@ -69,9 +87,17 @@ it('should do nothing with no options', async () => {
     path.join('Output', 'Awesome.rom'),
     path.join('Output', 'Best.rom'),
     path.join('Output', 'Brilliant.rom'),
-    path.join('Output', 'Cheerful.rom'),
-    path.join('Output', 'Confident.rom'),
-    path.join('Output', 'Cool.rom'),
+    path.join('Output', 'Dainty', 'Dainty (Track 01).bin'),
+    path.join('Output', 'Dainty', 'Dainty.cue'),
+    path.join('Output', 'Daring', 'Daring (Track 01).bin'),
+    path.join('Output', 'Daring', 'Daring.cue'),
+    path.join('Output', 'Dazzling', 'Dazzling (Track 01).bin'),
+    path.join('Output', 'Dazzling', 'Dazzling.cue'),
+    path.join('Output', 'Dedicated', 'Dedicated (Track 01).bin'),
+    path.join('Output', 'Dedicated', 'Dedicated.cue'),
+    path.join('Output', 'disk1_Cheerful.rom'),
+    path.join('Output', 'disk1_Confident.rom'),
+    path.join('Output', 'disk1_Cool.rom'),
   ]);
 });
 
@@ -85,9 +111,17 @@ describe('dirLetterLimit', () => {
       path.join('Output', 'A', 'Awesome.rom'),
       path.join('Output', 'B', 'Best.rom'),
       path.join('Output', 'B', 'Brilliant.rom'),
-      path.join('Output', 'C', 'Cheerful.rom'),
-      path.join('Output', 'C', 'Confident.rom'),
-      path.join('Output', 'C', 'Cool.rom'),
+      path.join('Output', 'D', 'Dainty', 'Dainty (Track 01).bin'),
+      path.join('Output', 'D', 'Dainty', 'Dainty.cue'),
+      path.join('Output', 'D', 'Daring', 'Daring (Track 01).bin'),
+      path.join('Output', 'D', 'Daring', 'Daring.cue'),
+      path.join('Output', 'D', 'Dazzling', 'Dazzling (Track 01).bin'),
+      path.join('Output', 'D', 'Dazzling', 'Dazzling.cue'),
+      path.join('Output', 'D', 'Dedicated', 'Dedicated (Track 01).bin'),
+      path.join('Output', 'D', 'Dedicated', 'Dedicated.cue'),
+      path.join('Output', 'D', 'disk1_Cheerful.rom'),
+      path.join('Output', 'D', 'disk1_Confident.rom'),
+      path.join('Output', 'D', 'disk1_Cool.rom'),
     ]],
     [2, [
       path.join('Output', 'A1', 'Admirable.rom'),
@@ -97,9 +131,17 @@ describe('dirLetterLimit', () => {
       path.join('Output', 'A3', 'Awesome.rom'),
       path.join('Output', 'B', 'Best.rom'),
       path.join('Output', 'B', 'Brilliant.rom'),
-      path.join('Output', 'C1', 'Cheerful.rom'),
-      path.join('Output', 'C1', 'Confident.rom'),
-      path.join('Output', 'C2', 'Cool.rom'),
+      path.join('Output', 'D1', 'Dainty', 'Dainty (Track 01).bin'),
+      path.join('Output', 'D1', 'Dainty', 'Dainty.cue'),
+      path.join('Output', 'D1', 'Daring', 'Daring (Track 01).bin'),
+      path.join('Output', 'D1', 'Daring', 'Daring.cue'),
+      path.join('Output', 'D2', 'Dazzling', 'Dazzling (Track 01).bin'),
+      path.join('Output', 'D2', 'Dazzling', 'Dazzling.cue'),
+      path.join('Output', 'D2', 'Dedicated', 'Dedicated (Track 01).bin'),
+      path.join('Output', 'D2', 'Dedicated', 'Dedicated.cue'),
+      path.join('Output', 'D3', 'disk1_Cheerful.rom'),
+      path.join('Output', 'D3', 'disk1_Confident.rom'),
+      path.join('Output', 'D4', 'disk1_Cool.rom'),
     ]],
     [3, [
       path.join('Output', 'A1', 'Admirable.rom'),
@@ -109,9 +151,17 @@ describe('dirLetterLimit', () => {
       path.join('Output', 'A2', 'Awesome.rom'),
       path.join('Output', 'B', 'Best.rom'),
       path.join('Output', 'B', 'Brilliant.rom'),
-      path.join('Output', 'C', 'Cheerful.rom'),
-      path.join('Output', 'C', 'Confident.rom'),
-      path.join('Output', 'C', 'Cool.rom'),
+      path.join('Output', 'D1', 'Dainty', 'Dainty (Track 01).bin'),
+      path.join('Output', 'D1', 'Dainty', 'Dainty.cue'),
+      path.join('Output', 'D1', 'Daring', 'Daring (Track 01).bin'),
+      path.join('Output', 'D1', 'Daring', 'Daring.cue'),
+      path.join('Output', 'D1', 'Dazzling', 'Dazzling (Track 01).bin'),
+      path.join('Output', 'D1', 'Dazzling', 'Dazzling.cue'),
+      path.join('Output', 'D2', 'Dedicated', 'Dedicated (Track 01).bin'),
+      path.join('Output', 'D2', 'Dedicated', 'Dedicated.cue'),
+      path.join('Output', 'D2', 'disk1_Cheerful.rom'),
+      path.join('Output', 'D2', 'disk1_Confident.rom'),
+      path.join('Output', 'D3', 'disk1_Cool.rom'),
     ]],
   ])('it should split the letter dirs: %s', async (limit, expectedFilePaths) => {
     const options = new Options({