The 32-bit Attempts - 1996 & 1997
Streets of Rage 3 was clearly intended to be the final Genesis/Megadrive Streets of Rage game. The graphics & gameplay could not be pushed any further under the 16-bit hardware, and so the next logical step was to create any new Streets of Rage game on the Next Generation consoles that were released in late 1994.
Of course, the idea of a Sega franchise title such as Streets of Rage appearing on the Playstation was unthinkable, so the first attempts were for Sega's ill-fated Saturn console. Sega clearly were going to update the series; both Shinobi & Golden Axe, Sega's other classic franchises, received Saturn updates (both sadly crap). But instead of trying to develop the sequel in-house Sega tried to purchase the half-completed Fighting Force from Core Design (of Tomb Raider fame) and turn it into Streets of Rage 4. This deal never happened, and Sega apparently gave up on the idea of a Saturn sequel (probably because the sequel would need to be 3D, and the Saturn was woefully underequipped for 3D games). However, the Saturn was a far superior 2D machine to the Playstation and I think Sega could and should have took advantage of this to create a 2D Streets of Rage masterpiece with some stunning animated visuals. Treasure's little-known Saturn classic Guardian Heroes (see screenshot) is an example of what Streets of Rage 4 could have been like.
Another aborted attempt at Streets of Rage 4 was apparently Die Hard Arcade, a 3D Streets of Rage style game released in the arcades on Sega's S-TV system in 1996-7 and later converted to the Saturn. This was rumoured to have been at one stage Streets of Rage 4 before Sega decided against an arcade sequel. This could have a been a good Streets of Rage 4, as it mixed the standard action with elements of Sega's Virtua Fighter, giving the fighters lots of moves and combos.
The Death of Dreamcast Streets of Rage 4 - 1999
Finally, with a machine capable of handling what was envisaged for the game, development on Streets of Rage 4 by Ancient & Sega started in 1999 for the Dreamcast. A small demo (with tunes from Yuzo Koshiro) was made and shown to Sega. However, executives from Sega of America, unaware of the series' history, shot the idea down on the basis of its genre alone. The side-scrolling beat'em up had rapidly gone out of fashion in the mid-1990s, and attempts to bring the genre into 3D (such as Fighting Force) had been unsuccessful. This meant that Sega were unwilling to commit to a game that in their eyes had little chance of making a good financial return (despite the fact that a Streets of Rage sequel would pretty much sell itself). Take a look at this SegaWeb.com SOR4 article from 1999 for more info.
X-Box Bound? - March 2001
The story doesn't end there though. With the Dreamcast dying, Sega began changing it's focus to becoming a software only developer, a process that can be seen quite visibly today. It's franchises, previously restricted to Sega machines, are now being updated on other machines - Sonic Advance on GBA and Sonic Adventure 2 on GC being notable examples.
With this new focus on software, Streets of Rage 4 may recommence - read this SegaWeb.com interview with Yuzo Koshiro from March 2001. In it, Yuzo says that "now Sega teams are independent we'll replan it and bring it to Hitmaker first. If they're interested in making it for Xbox and make a contract with us, I want to restart the plan". He also talks about some ideas for the game: "I'm thinking about a first-person mode. And needless to say, in 3D. And the game will connect online for multi-play" and "My sister [Ayano Koshiro, Ancient art designer] designed five new characters for SoR4 already".
Overworks to return to their classics? - June 2001
In this IGN-Dreamcast interview with Overworks, Noriyoshi Ohba states that "I'm thinking of developing more games for the U.S. market like the "Revenge of Shinobi" series and "Streets of Rage" series, which I once worked on for the Genesis". Could this mean that Overworks (formerly AM7, the Streets of Rage & Shinobi team) will be developing a new Streets of Rage?
Hitmaker to develop? - September 2001
Following on from Yuzo's statements about Hitmaker being the team he wants to develop SOR4, there are some new rumours going around at the moment that sound quite feasible - check out this article over at XBoxActive.com. Apparently Ancient have produced another demo of the game and have proposed the game Hitmaker, who have accepted the game. Interestingly, Hitmaker's current project is Crazy Taxi Next for X-Box. This, together with Yuzo Koshiro's enthuiasm for the console, points very strongly to SOR4 being developed for the X-Box. Also, the fact that a demo is already up and running means that we can expect the game pretty soon - if the rumour is true...
Still a rumour? - March 2002
However, there is still no official confirmation from anyone that development has started. Even Yuzo Koshiro, after his quite positive interview statements in 2001, said in a March 2002 interview (see OPFCG interview) that a new game is "just a rumor for now".
Overworks developing new PS2 Shinobi title - May 2002
Having previously said that they would like to return to their classic series like Shinobi (and Streets of Rage), Overworks have annouced that they working on a 3D Shinobi title for the PS2 for release later in the year. This makes an Overworks-developed SOR4 look more likely, especially if the new Shinobi game is successful.
D3 to develop PS2 remake of SOR - Dec 2002
The partnership between Sega and D3 (cleverly-titled 3D Ages) has led to the announcement of a Sega Ages range of classic remakes, due for release in the second half of 2003. These budget PS2 games draw mainly on 8 & 16 bit Sega classics, and will use the power of the PS2 to enhance the graphics and sound. Streets of Rage is among the titles announced - whether the remake will be of the original or SOR2 is not known, nor the extent to which the gameplay, graphics and sound will be changed. However, if the remake is successful it could lead to Sega changing its attitude towards an all-new SOR game.
Dreamcast SOR4 demo videos released - Jan 2003
Visit Tokyopia.com for videos.
Streets of Rage 4 is clearly not in active development at this time. All that exists at the moment are ideas and possibly an early demo. I personally think that SOR4 will get made for the current generation of consoles; the constant rumours flying around, Yuzo's keenness to make the game, together with Sega's approval of 3D updates of other classic series such as Shinobi, stringly suggest this. If it does enter development, I would expect to see Overworks or Hitmaker develop the game, with Ancient & Yuzo Koshiro possibly being involved too. However, even Yuzo's presence is not guaranteed; he was not offered the soundtrack for other games in the Shinobi series following Revenge of Shinobi & The GG Shinobi, so it is possible that he may not be asked for his talents for the fourth game.
The platform it will be released on is tricky to predict. The evidence for Xbox is strong; Yuzo's own preference plus the release of other Sega games (notably ones developed by Hitmaker) makes it seem very likely. But the release of Shinobi on PS2 means that Sega obviously see a retro-gaming market on Sony's console too, and presumably that Overworks prefers the PS2 over other consoles. This could possibly mean that a Hitmaker-developed sequel would end up on the Xbox, while if Overworks were to develop the game it would appear on PS2.
What will probably be the deciding factor in the choice of platform will be consoles sales. At the moment PS2 has the lead in worldwide sales, whilst Xbox is in third position behind the Gamecube. This means that a PS2 release looks most likely simply because there is the potential for more sales and so higher profits to be made. I personally would like to see a release on all the next-gen consoles so that everyone can enjoy the game.
The probability that SOR4 will feature 5 new playable characters suggests that it may be unconnected to the original 3 games (if they include Axel & Blaze they will have 7 playable characters, which seems a lot). I don't like the idea of a first-person perspective - I can't see how this would make the game easy to play. The idea of net-link up also seems absurd; the point of games like Streets of Rage was playing them with your mates, not with someone down the other end of a phoneline.