You can track when Sega largely fell and its largely when Sammy bought them out. The last game made before this was "Dodoro". Sammy's advice to Sega after they bought them out was to focus on the arcade market which was dying off at the time massively.
Sega can come back but they need to rehire Suzuki, Naka and Mizuguchi. It is a bad take when almost all the old guard at many of these Japanese companoes have been let go or wanted to leave, including Sakaguchi and Kojima-san. I don't CARE about it being a cultural thing that if someone screws up once big time you don't fire them you just place them somewhere that is so unimportant and awful you passively bully someone into leaving. Nonsense like this is why "Final Fantasy" isn't as good as it use to be with Final Fantasy X and before. This is why many people haven't been happy with what Square has made until Octopath Traveller. I won't call them the merged name because Square has largely been in charge because nothing I see outside of DQ and SO resembles an Enix game in any way and now it seems Tri-Ace is facing bankruptcy.
On the opposite side Sony gutted their Japanese division which had my favorite game series "Gravity Rush". Innovative gameplay? Check. Good artstyle? Check. Interesting story? Check. Before this it was "Folklore" and trailing after this was likely "Cursed Mountain" and "Madworld". I like for this stuff to challenge me and after Sega was gone essentially nothing did this. Oh sure I'll like a game but won't LOVE it...Sega had "Segagaga", Panzer Dragoon, Illbleed, Clockwork Knight, Nights, JSR, Skies, etc. Sure some Indie games do Arthouse like Sega but they won't have the budget to truly make it complete. Since Sony's Japanese division is gone I have 0 faith that there will be even ONE game I love in the PS5/Series X gen.
Yeah I'd take those people being hired back at Sega and pushing their arcade division because arcades will come back. The live service crap is going to start bombing more and soon arcades will come back. You want a more steady stream of income sell arcade machines or get into leasing them. Frankly this is what should be done with Tekken, DOA and SoulCalibur. I am honestly worn out that Namco thinks we should shoulder the entire cost of development of new characters in pack after pack, never getting a complete edition of the game for consoles. I also think other fighting gamers are as well...it doesn't matter that home consoles CAN do them perfectly well, it matters that the arcade was largely subsidizing the dev. cost and most gamers can't or won't pay for arcade quality joysticks. Sega doesn't even have to just focus on VF as there are plenty of racers and gun games they made for the arcade as well as other genres that fit the models that D&B and others largely have.
edit: The arcade division back is a start for Sega then they can come back on the console front with enough money. Bringing back sports before this with a full game would be huge too as long as it had good gameplay...this gambling so you can play a full team with beloved players in main or fantasy is ridiculous.
Seriously though the arcade division is a sitting duck with the "quality" of what Cheap Thrills puts out. Compare their new Cruisin' which nickels and dimes you with fewer tracks and non-Outrun style(pure timer) compared to before and they didn't really change much. That's likely their best game even. The games are largely not fun in my opinion regardless of how bad most of their games look and they just rely on IP licensed games. -_-