Imagination working on next-generation arcade systems for Sega

British technology firm Imagination is preparing to deliver a new arcade system to Sega at the start of next year, according to the company's financial statements, which will be based on the firm's next-generation graphics system.

Imagination - which owns the PowerVR brand of graphics accelerator technology, the latest iteration of which will be used in the new Sega cabinets - previously supplied technology for Sega projects including the Dreamcast and the Naomi arcade cabinets.

The firm is also working with Sammy on a new arcade board development, although it's not thought to be cutting edge technology - Sammy has generally preferred to focus on low-cost solutions rather than high end systems.

The new Sega board would be the first arcade hardware to be developed by the Japanese giant since the Naomi boards, which benefited from being very similar in design to the Dreamcast. In recent years, Sega has focused on Microsoft's Chihiro arcade boards, which are based on the Xbox architecture, and is expected to work increasingly on Sammy's Atomiswave platform - which is not dissimilar to Naomi - in future.

The news that Imagination is to supply technology for a new cutting-edge Sega arcade system comes following the decision of gambling machine and arcade giant Sammy to complete its acquisition of the Japanese publisher, in which it purchased a 22 per cent stake late last year.

Sammy president - and now Sega chairman - Hajime Satomi has said since the acquisition that he wants to see Sega focusing increasingly on the profitable arcade business, which has in recent years been compensating for losses in the company's home console software division.