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An Abridged History of Sega’s Awesome Arcade Racers

We speak to ‘Sega Rally’ maker Tetsuya Mizuguchi as we break down the racing titles that helped Sega dominate the arcades.

Above: Daytona USA, as it was ported to PlayStation Network and Xbox Live Arcade. Screenshot courtesy of Sega.

(It should go without saying, but: read this article while listening to this, thank you.)

Racing games have long been graphical showcases, utilizing the latest hardware to deliver faster, more realistic thrills. And, as such, there are arguably few genres that date more quickly.

Despite this, the history of racing games is an interesting one, and there is no company that has pushed the genre forward more than Sega. At its peak, from the early 1980s to the early 2000s, Sega released a veritable cornucopia of classics: Turbo, Out Run, Hang-On, Virtua Racing, Sega Rally, Daytona USA, Manx TT Super Bike and F355 Challenge among them. Here we look at some of the games that defined an important racing era during a period of outstanding technological development.


1981-1991: The Rise of the Sega Racer

We start this story with Turbo, a 1981 arcade title programmed by Steve Hanawa that proved a bit of a game changer with its early use of sprite-scaling, a pseudo-3D technique allowing sprites to shrink and grow in a way that provided an illusion of motion and depth. The game used this tech on roads, surrounding environment such as buildings, and AI cars to replicate a sensation of driving towards a vanishing point.

Sega's major arcade rival Namco would build on this technique the following year with Pole Position, as would Yu Suzuki, the lead of Sega's famous AM2 R&D division, who arguably perfected the sprite-scaling technique with his "Super Scaler" arcade board. Suzuki, then a young designer and racing enthusiast, who would later go on to create the Virtua Fighter and Shenmue series, first employed this technology in 1985's iconic bike racer Hang-On.

Super Hang-On, the 1987 sequel to Suzuki's Hang-On, is playable in Sega's 1988-set open-world game of 2017, Yakuza 0 (which, coincidentally, is produced by Daytona USA designer Toshihiro Nagoshi). Screenshot courtesy of Sega.

Suzuki set a trend during this period for the lavish production standards that would later define him, as Hang-On featured a variant deluxe cabinet, allowing players to tilt a sit-on model bike, left and right, in order to steer. These innovations led to increasingly immersive driving experiences, such as Out Run, released in 1986, and the less-well-remembered Power Drift in 1988.

1992-1996: The 3D Leap

Suzuki's biggest innovation in the racing genre, though, would come with the release of the breakthrough 3D racing title Virtua Racing. The 1992 game was an important graphical leap at the time, built on Sega's then cutting-edge Model 1 arcade board. It was not the first fully polygonal 3D racer—that accolade goes to Namco's 1988 title Winning Run—but Virtua Racing, also known simply as V.R., was more polished than said predecessor, introducing many concepts that we now take for granted in racing games, such as fully animated pit crews, and the ability to switch between first- and third-person perspectives.

There were two other prominent designers at Sega at this time, looking toward the future of the racing genre. The first was Toshihiro Nagoshi, a flamboyant designer who would later go on to develop the Super Monkey Ball and Yakuza series. He built on Suzuki's Virtua Racing success with his own Daytona USA of 1993.


"No one did it better than Sega with arcade racing games." — Tetsuya Mizuguchi

The second was Tetsuya Mizuguchi. Now more commonly associated with music-based titles such as Rez, Lumines and Child of Eden, Mizuguchi was the lead designer on 1994's Sega Rally Championship.

Including Suzuki's V.R., these three Sega classics, led by these three minds over this period of three years, represented the ultimate trifecta in Sega's arcade racing success.

"No one did it better than Sega with arcade racing games," Tetsuya Mizuguchi tells me. "They led—they owned—the genre, and had the tech and mechanics down. It naturally became part of their DNA. I'm definitely proud to have been a part of a legacy in the making."

Daytona USA built on V.R.'s underlying Model 1 tech with its use of the more powerful Model 2 board, with full texture mapping and unflinching 60-frames-per-second gameplay. Daytona was the most impressive looking 3D game in the arcades of the day, and a big earner for Sega (and the many arcades that decided to invest in a unit or two).

Daytona USA, as it was ported to PlayStation Network and Xbox Live Arcade. Screenshot courtesy of Sega.

"Daytona USA showed off the Model 2 coin-op tech, which would help transform the arcade industry," explains Keith Stuart, games editor at The Guardian and author of Read Only Memory's Sega Mega Drive/Genesis Collected Works. "Daytona was also such an amazing game it had quite a damaging effect on racing sim sales—no-one needed to buy anything else!"


Sega Rally Championship emerged a year later, in 1994, after an intense development period. It incorporated fully licensed cars—something now taken for granted—and uneven driving surfaces that made for a vastly different experience to the flat asphalt of other racing games.

"I was following rally then" says Mizuguchi. "I thought: From the desert to the forest and everything in between—streets, towns, cities, hills, mountains—we could build a vibrant world, taking players on a wild ride as they navigated freely through the rich environment."

Unsurprisingly, given the nature of the innovative courses Mizuguchi and his colleagues were trying to produce, development was not exactly a smooth ride.

"Being our first racing game as that team, we all poured our passion and soul into the game," he explains. "The 12 of us, all in our 20s and with very little racing game experience, spent 10 very focused and concentrated months making the game, including a trip to the West Coast of the US, driving through the desert, Yosemite and highways—it was a priceless experience."

Above: Sega Rally Championship in action, uploaded by YouTube user hat301

Mizuguchi would go on to work on the game's less well-received 1996 follow-up, Sega Touring Car Championship, which he admits was more restrictive than its predecessor, though he's proud to expand on the licensing aspect that he had started in Sega Rally.


"From a business standpoint, after having worked with automobile manufacturers to license their cars for Sega Rally—which, in and of itself was a huge milestone, as it hadn't been done before—we were able to widen that opportunity even more with STCC, partnering with Mercedes, Opel, Alfa Romeo and so on. Cross-promoting a game and automobile brands was a new thing for these manufacturers, but I want to believe they quickly understood the value."

Mizuguchi was ahead of the curve here. In a similar fashion to team and player licenses in sports games, manufacturer licensing became increasingly important to racers. Two years after STCC's release, this would become a major selling point of Polyphony Digital's Gran Turismo, and it's a trend that continues today.

Where Sega fell down slightly during this period was in the console ports of its arcade racers—the company wouldn't really get them right until the Dreamcast era, arguably too late given that system's unfortunate end-of-the-line status in Sega's home hardware history. Virtua Racing initially received a port to the Mega Drive, utilizing the much-feted (and horribly expensive) Sega Virtua Processor. While an impressive effort given the obvious limitations of the Mega Drive's hardware, it did not come close to the arcade original. A later port for the 32X add-on, Virtua Racing Deluxe, fared better and received excellent reviews—but the 32X flopped so not many people got the chance to play it.


Related, on Waypoint: At least one of us here did play the hell out of 'Virtua Racing Deluxe' 

A later Saturn port of V.R. was outsourced by Sega to Time Warner Interactive and ran well, but by the time of its release in 1996, the game's graphical sheen had waned in the face of stiff competition.

Sega's advances in the racing game industry during the middle of the 1990s had proven an inspirational push to rival companies, and "breathed new life into other racing games that later followed", says Mizuguchi. The most famous result of this competitive period was arguably Namco's Ridge Racer, which built on Virtua Racing's successes in the same way Pole Position had built on Turbo's a decade prior. Ridge Racer was not only an arcade hit, but a vital instrument in Sony's early success in the console field, due to its relatively faithful PlayStation port. This was a blow for Sega's Saturn, whose Daytona USA port had failed to replicate the appeal of its expensively produced arcade counterpart.

The Saturn was reportedly more powerful than the PlayStation in some ways, but was difficult to program for and struggled to produce 3D graphics with the apparent ease of its rival. Daytona USA on the Saturn felt slow and choppy due to a poor frame rate and pop-in issues. But the Saturn version of Sega Rally was much better received, so much so that the team responsible for it reworked Daytona USA, releasing an updated version, Daytona USA: Championship Circuit Edition. This version maintained a stable 30fps, which, while half that of the arcade original, was much better than the first Saturn release.


Nagoshi, meanwhile, would build on his stellar use of Model 2 hardware in Daytona USA with the beautiful Model 3 showcase Scud Race in 1996 (known as Sega Super GT in the US). Billed as a spiritual successor to Daytona USA—which eventually received a proper sequel in 1998— Scud Race still looks impressive today but is rarely spoken about with such fondness as the other games mentioned here, partly because it never received a home port.

Above: Scud Race in action, uploaded by YouTube user MrThunderwing

1999-2003: The Swansong Period

Sega's racing dominance was on the downturn by the early 2000s. Yu Suzuki's return to the genre in the late 1990s with the Ferrari-licensed F355 Challenge, developed while he was also deep into the production of Shenmue, is perhaps the apotheosis of everything he had tried to achieve in the arcade realm up to that point.

Released in 1999, this love letter to the Italian motor maestro from an unabashed enthusiast is deliberately austere: Featuring only a cockpit view and one car, the F355 of the title, its focus is on absolute realism. It would receive one of Sega's best home ports for the Dreamcast the following year, a title whose only concession is its lack of the arcade version's enveloping triptych of screens, another sign of Suzuki's trademark artful indulgence and attention to physical (as well as digital) detail.

Sega's arcade swansong in the racing genre is 2003's OutRun 2, a beautiful driving experience that kept things simple during a time when the trend was for spectacular crashes ( Burnout) and turbo-boosted street racing ( Need for Speed: Underground and Midnight Club).


Above: 'OutRun 2' on the Xbox, gameplay uploaded by YouTube user 316whatupz

OutRun 2 contained the telltale signs of aging masters. Racing games were moving on, and demanding consumers were shifting to a more content-heavy console experience with an emphasis on quantity: more tracks, more cars, more online, more options. That OutRun 2's two wonderful home ports, the Xbox-only OutRun 2 and multi-platform OutRun 2006: Coast 2 Coast, received great reviews but a muted consumer reception says a lot about the prevailing trends of the time.

There remain signs of that old Sega spark, now and then—the drift-focused Initial D series, popular in Japanese arcades but little-played in the West, is excellent, and the company recently teased a third "proper" Daytona USA title that looks remarkably faithful to the style of its predecessors. But this output is iterative, rather than revolutionary.

For 20 years, Sega dominated the arcade racer and pushed the genre further than just about any other developer out there. Indeed, it's hard to imagine what could push the genre much further. Perhaps VR will hold the key. The other VR, I mean.

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