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Most of their internal talent is long gone, but they could always work with other talented partners to develop new games. I won't hold my breath though. It's such a shame what the Sammy merger did to this company. I don't even look at them as Sega in anything but name anymore.
Another real tragedy is that Sega rejected a merger proposal from Namco shortly before the hostile takeover by Sammy. Sega-Namco would have been a damn cool company!