Yup. Although sometime in the mid-90's, the home console business became more lucrative and Sega really missed the wave. Games at home were their own distinct art form: longer, more complex, far more replay value. Arcade games rarely have more than 15-20 minutes of content and this was true of Model 3 and Naomi games. Sega's arcade focus became a major liability by the time Dreamcast rolled around.
Well, as someone who still regularly plays arcade games I first played decades ago, but gets bored with most modern home games halfway through the tutorial, I'm sad that the incentive and design skill to create those 15 minute intense gameplay experiences has largely been lost.
(Not claiming it would make business sense to try to cater to weirdos like me, or denying that it made sense for Sega to get out of the hardware game or whatever. But probably 95% of their output post-Dreamcast I find completely uninteresting. :)
