The era of the licensed arcade racer has been and gone - or so says Dan Greenawalt, director of the forthcoming Forza 3. The Turn 10 developer believes that the rise of the accessible driving sim has effectively forced the classic arcade racer into retirement.

"I actually think that the definition of arcade vs sim has totally changed," said Greenawalt, speaking to Videogamer last week. "Graphics have gotten better, games are more licensed, and even arcade games are getting damage. The physics are getting better because the platforms are stronger. Our approach to building a great sim engine, and putting in layers, has made obsolete the idea of an arcade game that's still licensed and has beautiful graphics."

Greenawalt believes that arcade racers must now embrace more outlandish features and gameplay concepts, to do the things that sims cannot.

"If you're going to do an arcade game, put in rockets and explosions and crazy shit and don't do licensed cars! Then you can do some crazy stuff. But that old idea that there's arcade vs sim, I think that's people being short-sighted about the fact that you can make a game that's really exciting, really fun, really entertaining, but the core is a simulation game, and the graphics are beautiful."

For more on Forza 3, check out our full interview with Greenawalt, later today.