This is true, Sengoku 3 is a huge improvement over the first two. The Neo-Geo got a bunch of mediocre beat 'em ups early on in its life, but none were too great -- none could match the great beat 'em ups of the day like the TMNT games, Streets of Rage, Golden Axe, Final Fight, etc. And then after the early '90s, the genre disappeared on the platform in favor of fighting games. The only later Neo-Geo beat 'em up is Sengoku 3, and it's by far the best beat 'em up on the system, and yeah, is a legitimately good game.

