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Inside The Bizarre Development Of Shenmue III

by Ben Reeves on Nov 06, 2019 at 01:00 PM

Shenmue isn’t like other open-world games. In addition to the traditional fast-paced fistfights, the series gamifies some of the most prosaic moments from everyday life. While most games offer players a sense of freedom, Shenmue’s freedoms extend to opening silverware drawers, feeding stray cats, and collecting toys from capsule vending machines.

Shenmue is often derided for its plodding narrative, goofy characters, and unusual attention to detail, and yet fans have been eagerly awaiting the next entry for almost two decades. Shenmue is weird, but that weirdness has earned it a legion of fans who ponied up more than six million dollars through Kickstarter to revive the brand. In order to explore what makes this franchise tick, we traveled to Ys Net’s offices in Japan for an exclusive demo and a peek into the mind of creator Yu Suzuki.

Creator Yu Suzuki took a poll on what fans wanted to see return to Shenmue III, and the third most requested feature was forklift driving


Shenmue was supposed to save Sega. By the late-’90s, Sega was in decline. The company’s Saturn console had failed to gain traction, and the publisher had lost much of the mindshare it had gained during the Genesis era. Sega was banking big on its new Dreamcast console, but it needed premium, big-budget software to drive players to the new hardware. Sega turned to Yu Suzuki and Shenmue.

Today, Suzuki is widely regarded as a legend of Japanese game design. As one of Sega’s star developers for over 26 years, Suzuki produced a string of arcade hits like Hang-On, Space Harrier, and After Burner. One of Suzuki’s biggest successes, Virtua Fighter, helped pioneer 3D graphics and briefly gave fighting-game giants like Street Fighter and Mortal Kombat a run for their money.

In 2011, after more than a quarter-century with Sega, Suzuki left the company to form his own studio: Ys Net. This studio’s offices are a simple collection of rooms tucked into a nondescript building in the middle of Tokyo’s urban jungle. We arrived at Ys Net’s front doors around noon – two hours late for our appointment. The day before, a typhoon had torn through Tokyo, completely destroying the city’s public-transportation timetables. Fortunately, Suzuki was three hours late. When the designer finally arrived at his nearly empty office, he offered a weak smile and a bow. He was eager to get back on schedule, but he was also excited to share his inspirations for the original Shenmue.

Back in the mid-’90s, Sega wanted Suzuki to take Virtua Fighter and spin it off into something new – something like an RPG. Suzuki had been waiting for an opportunity like this. As a young programmer, he was mesmerized by Apple II RPGs like Ultima and Wizardry. He wanted to take some of the concepts featured in those early releases and expand them into a modern game. He rushed home and began jotting down ideas for his own epic RPG narrative about a boy on a quest to avenge his father’s death.

Before long, a small team of Sega employees was helping Suzuki prototype this new RPG for the Saturn. The game’s early working title was The Legend of Akira, named after one of Virtua Fighter’s mainstays, but as development progressed, the title evolved into an identity of its own. Suzuki renamed the game Shenmue, a Japanese word meaning spirit tree.

Originally pitched as an RPG, Shenmue was wildly experimental and combined 3D fighting elements with adventure game-like information gathering and a finely detailed town that players could explore at their own pace. In many ways, Shenmue was ahead of its time as it experimented with several open-world fundamentals almost two years before Grand Theft Auto III would codify and popularize the genre.

“Shenmue was really one of the first open-world games,” says Suzuki. “After Shenmue, there were a lot of other open-world games. It’s become one of the biggest genres, and I'm very happy to know that I created the original, which sort of triggered that kind of trend of open world.”

In 1999, the term open world hadn’t been coined, so Suzuki described Shenmue as a F.R.E.E. game – an acronym meaning Full Reactive Eyes Entertainment. This strange word jumble was Suzuki’s way of letting players know that they were free to interact with anything they saw in Shenmue’s environments, and its world would react to them. Players could open any drawer in Ryo’s house and examine its contents, chitchat with every person in town, and waste days playing old Sega games in the arcade. Shenmue’s attention to detail was painstaking. Suzuki had determined the blood type for all of Shenmue’s nearly 250 NPCs, and the game’s weather system was based on real-world data from Japan in the ’80s. Suzuki had created a game unlike anything else on the market.

All those small details came with a cost. Shenmue’s development had stretched on for six years and its budget had ballooned to almost 50 million dollars, making it the most expensive game Sega ever produced. When it released in December of 1999, Shenmue received generally positive critical reviews, but it was not the blockbuster Sega hoped for. After the release of Shenmue II in 2001, the publisher was hesitant to commit to another entry. Suzuki tried to keep the series alive by prototyping a Shenmue MMO, but that never saw the light of day. Series’ star Ryo made a few cameos in games like Sonic & Sega All-Stars Racing, but as time wore on, fans began to fear that they may never see a resolution to Shenmue II’s cliffhanger ending.

But that wasn’t the end of the story. As luck would have it, Suzuki would get another opportunity to continue his epic tale, and that chance came more than a decade later from halfway around the world.



Ryan Payton has covered a lot of ground in the games industry over the years. He worked his way up the ladder at Kojima Productions to become an assistant producer on Metal Gear Solid 4: Guns of the Patriots, then moved to 343 Industries to be a creative director on Halo 4, before finally founding his own studio, Camouflaj, where he is currently working on Iron Man VR. Before any of that, Payton was a Shenmue fan.

“I imported the Japanese version and played it as a college student, and I actually learned a lot of Japanese from it,” says Payton, who is now project advisor on Shenmue III. “I was always really bothered by the fact that Yu Suzuki had this incredible saga of games he wanted to tell, and how that was seemingly ending with Shenmue II. I always felt, in the back of my mind, that if I ever had the opportunity to help Yu Suzuki I would, because in a lot of ways he was a god of the Japanese games industry.”

By 2011, Payton gained the means and the knowledge to help when he raised $500,000 dollars on Kickstarter to fund development of an episodic stealth series called République. Payton’s experience on Kickstarter was so positive that he immediately thought that the service could be used to fund another Shenmue game. Thanks to the help of Sony’s Mark Cerny, Payton was able to connect with Suzuki and pitch him the idea of using Kickstarter to fund the development of Shenmue III.

As we sit around the tiny, austere conference table at Ys Net’s offices, Suzuki recounts those early discussions and the emotional journey he took while deciding to bring Shenmue to Kickstarter. “Of course, I was thinking really deeply,” he says. “I knew it could be hard, but the most important thing for me is that I make this game for the fans, for those who are willing to support us.”

Before the Kickstarter, Suzuki says he briefly considered scaling back the scope of the project to create a simpler, Telltale-style adventure game that would easily allow fans to experience the end of the story. In the end, Suzuki ultimately felt that fans deserved a full Shenmue experience. By early 2015, the pieces were falling into place. Sega licensed the property to Suzuki, and Sony was interested in supporting the designer by promoting his Kickstarter during its E3 presentation.

I was really worried about how Yu Suzuki was going to be managing the budget of Shenmue III."

After the announcement, more than 60,000 fans flocked to that Kickstarter project, pledging more than six million dollars. Suzuki holds up the Guinness World Record he earned for fastest-growing crowdfunding campaign. It’s clear that he is proud of Shenmue’s Kickstarter success, and while six million dollars was a significant boost to Suzuki’s moral, it was still a pittance compared to Shenmue’s previous budgets.

“Because I'm a fan, I remember reading about the immense budget of Shenmue and how that might have led to the franchise's long-standing hibernation,” says Payton. “I was really worried about how Yu Suzuki was going to be managing the budget of Shenmue III, and maybe unfairly. He has really done an incredible job building a really big game with a relatively small budget. But again, Yu Suzuki is a visionary, and he's very stubborn. He does not want to compromise.”

“In the previous Shenmue games I had a bigger team and because those team members kept bringing new ideas to the game, I had to continually change or correct things,” adds Suzuki. “There were many redos – we were doing things again and again and again. For Shenmue III, I'm more involved directly in the details and all the elements of the game, so there is much less to redo. As a result, the effectiveness of development is much higher than the originals.”



It’s 7:30 p.m. in Tokyo, and the weather is sweltering. We’re stuck in traffic on the way from Ys Net’s offices in Shinagawa City to a dinner reservation in Yokahoma’s Chinatown. Tokyo’s traffic system is still reeling from the typhoon, and our 30-minute commute has turned into a 2.5-hour crawl across the Yokohama Bay Bridge. Hot and frustrated, Yu Suzuki pulls out his phone and begins watching an episode of the NBC crime thriller The Blacklist. Suzuki is a big fan; he thinks the show is incredibly well made. Later on, we all watch the first episode of Fuller House and laugh about the absurdity of being trapped in a car with a legendary Japanese developer while watching American sitcoms. “Full House is the foundation of Shenmue,” jokes Suzuki. The car ride is surreal, but it’s another opportunity to pick Suzuki’s brain.

Suzuki finds a lot of inspiration for his games while watching television and movies. During the creation of the original Shenmue, Suzuki watched one movie a day, on average, for over two years. He cites films like Casablanca and My Neighbor Totoro as inspirations, not specifically for their story, but for what they taught him about storytelling and character development. Shenmue III is – after all – largely a character study.

Shenmue tells the story of Ryo Hazuki, a stoic young man whose father is murdered before his eyes by a high-ranking member of a Chinese cartel – a man named Lan Di. Wracked with grief, Ryo sets off on a one-man quest to track down Lan Di and avenge his father. This quest takes Ryo out of his small town in Japan and into the heart of mainland China.

Shenmue III picks up the story after Ryo has met a mysterious young woman named Shenhua Ling. Shenhua’s fate is similar to Ryo’s in that her father has been kidnapped by the same criminal organization that employees Lan Di. The two join forces, track down Shenhua’s father, and get to the bottom of this mystery together.

“Ryo will discover that, somewhere in the past, his father visited Shenhua’s village and that there are some secrets there,” says Suzuki. “Ryo’s father was hunting for something there. That’s another layer of the mystery: How was his father involved with Lan Di?”

We catch up with Ryo after he travels to a large riverside village known as Guilin. This idyllic town is full of classic-looking temples and sloping, tiled roofs. Suzuki says this village is about 40 percent of the way into the main storyline and that it holds several important clues that will help Ryo track down Lan Di.

As with the previous Shenmue games, players can unravel this main mystery at their own pace, and there are plenty of activities to distract them while they’re at it. The town of Guilin is dense with over 140 shops, arcades, hotels, and temples. Players can spend days gambling on minigames such as the pachinko-esque Lucky Hit, get a part-time job driving a forklift, fish along the riverfront, collect herbs, and hunt for hidden in-game collectibles.

As Ryo wanders Guilin’s streets, we take in the local city life. Steam pours off the grills of a local food vendor as a group of monks practice their martial arts in a nearby courtyard. We walk past a couple and listen to them bicker about the size of their hotel room. The husband promises to buy his wife anything she wants from the market. Ryo peeks through the windows of a nearby apartment building and catches a man flexing in the mirror. Suzuki tells us that this character is actually modeled after a Kickstarter backer. Finally, at the end of the block, Ryo enters a local arcade where he can kill time by playing a variety of mechanical amusements and digital arcade games. One boxing game invites Ryo to test his might by punching padded targets. At the other end of the room is a parody of Virtua Fighter starring cutesy birds, called Chobu-chan.

Naturally, Ryo’s daily errands are occasionally interrupted by a quick-time action sequence or an all-out bar brawl. Shenmue’s original combat system was based on Virtua Fighter and felt a little complex to those who didn’t play a lot of fighting games. Shenmue III’s combat, on the other hand, has been completely reworked and feels less rigid than previous incarnations.

“We rebuilt Shenmue III’s combat from scratch,” says Suzuki. “It’s much more fun to play and more approachable, even if you don't have much skill. We’re using some A.I. elements so even if you’re just randomly pushing buttons something meaningful will happen.”

Without practice, we jumped into the game and worked our way up a tournament ladder with ease. Our first opponent is a small, young man with a shaved head. He comes out strong with a flurry of punches, but we dodge to the side and unleash a combo of our own against his exposed side and he crumples to the floor. Ryo’s movements feel natural and responsive, and we have no problem stringing together simple combos from a mix of light and heavy attacks.

Our second opponent is an older gentleman with a pompadour and a pencil-thin mustache. He’s a bit more imposing than our first match-up. Fortunately, Ryo has a few more tricks up his sleeve. In addition to traditional combos, Ryo has access to a number of prebuilt attacks that can be performed with the tap of the right bumper. Players can choose which attack is set to the combo button. These attacks range from grappling to high-flying spin kicks, but they almost always do a great deal of damage. We use a pre-built combo that ends with a wicked roundhouse to break through our opponent’s defenses and send him to his knees.

After a few more matches, Ryo starts to run out of steam. Thankfully, using a shortcut on the d-pad, we’re able to consume various foods, which restore a bit of Ryo’s health mid-battle. Naturally, Ryo can also expand his move set and strengthen his basic attacks by training at a kwoon or participating in local tournaments. While it remains to be seen if Shenmue’s story will be worth the wait, we walk away from our demo feeling better knowing that Shenmue’s action has never felt better.

We tour the YS Net offices, and creator Yu Suzuki shows off the original scripts for Shenmue


“To be honest I don't play many other games,” confides Suzuki before dinner. “If you say you like Chinese food, you probably mean that you like to eat Chinese food, but what I like is the cooking of the food, not the eating. In most cases in the gaming industry, the guys who create the games also like playing games. But in my case, I really just love to create, so the way I develop is very different from ordinary game developers.”

Suzuki is referring to his attention to mundane details. Shenmue’s specialty is its focus on the minutia of daily life. Players are free to get lost in Ryo’s artificial world – to collect meaningless figurines and chug soda. Fans appreciate these unusual aspects of Shenmue, not because they fill some arbitrary in-game checklist or bring them closer to the game’s credits, but because these tiny details conjure a deeper sense of verisimilitude.

Shenmue’s world isn’t real, but it feels real.

“For Shenmue III, I wanted to create images so strong that you could smell the colors in the countryside,” says Suzuki. “For me, it’s very important to create those images where you can feel the moisture or humidity. If possible, I wanted to create a sense of smell in the game.”

For Shenmue III, I wanted to create images so strong that you could smell the colors in the countryside,” says Suzuki.

As if highlighting this fact, one of the first things Suzuki showed us during our Shenmue III demo were its weather effects. The designer notes how rain creates tiny beads of moisture on Ryo’s jacket. A weather system might seem fairly standard for a modern open-world game, but these little details excite Suzuki. Later on, while exploring Ryo’s hotel room, Suzuki points out that players can make international phone calls to characters from the first two Shenmue games. Ryo can also open every drawer in his room and examine knickknacks that serve no purpose to the story. And, when players want to add something to Ryo’s inventory, the character must pick up each object individually and physically move them with his hands.

These little details might add to Shenmue’s sense of realism, but they are also the insufficient details that most designers sacrifice to speed up the action. Suzuki, on the other hand, doesn’t see how you could make a game any other way.

“In the real world, if you see some door and you want to open it, you open it. In the real world, you can touch and move everything,” says Suzuki. “Because I don’t play other games, I think it’s very natural to interact with everything … The keyword I often use is reality. Shenmue isn’t necessarily true to reality, but it is a reality you can trust as if almost real. That's what I consider entertainment. Somewhere between true and false is a reality that we’re trying to hit. People may think that I'm trying to create something real, but it's not truly real; it’s a new reality that I'm creating.”



Yu Suzuki isn’t a conventional game designer. Several times during our trip, Suzuki admitted that he doesn’t enjoy playing video games. In fact, before working at Sega, Suzuki had never played a video game. Better still, the designer only accepted Sega’s job offer because the company offered more vacation time than his other prospects. Orthodox or not, Suzuki is still a game designer who knows what he wants. He doesn’t care how other developers make their games; he knows what kind of game he wants to make. And Shenmue is unflinching in that vision to give players a window into the life of Ryo Hazuki – both the action-packed highlights and the quiet, simple moments.

“I think Yu Suzuki was at peak auteur status when he built the original Shenmue,” says Payton. “You could see him trying to innovate in so many areas – I think successfully in many of those areas. Whether it’s the kind of open-world nature of the game, or the need to plot out your day, or the ability to interact with the world in unique ways, they all added to the overall feeling of simulation. I think it was a little bit confusing for players and for critics, but like a lot of great art, as time goes on, we're able to look back and recognize just how special Shenmue was.”

With a relatively small budget, Suzuki looks to deliver another game that fits the mold he established 20 years ago. Shenmue III features a more refined graphics engine and some welcome improvements to the combat system, but the core experience remains full of the idiocrasies and daily distractions that Shenmue fans love. Yu Suzuki doesn’t care how the industry has evolved over the last 20 years. He knows what he wants. Moreover, he knows what Shenmue fans want.

Near the end of our trip, after we’d trudged through Japan’s Chinatown, Suzuki takes us to one of his favorite restaurants. We point at a picture of delicious-looking gyoza, but Suzuki waves us off and takes control of the menu. He’s going to order for us. After all, Yu Suzuki is a man who knows what he wants. We don’t eat gyoza that night, but the meal is incredible. 

This article originally appeared in the November 2019 issue of Game Informer.

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