The Fate of Shenmue III

In a recent interview with GameDaily Biz, Sega VP of marketing Scott Steinberg was asked about the progress of Shenmue III and whether the title would ever see the light of day. "I really can't answer that, although I will say that we look very closely at our IP and a few days ago we [announced] the comeback of Golden Axe...so having come back here in 2004 when we started to relaunch the company, part of our mission is to look at our library of IP and be real selective and smart about which ones we bring out."

Translation? Sega is currently bringing back some of its IPs like Golden Axe and recently OutRun, but what they are really analyzing is the financial risk of releasing a product they can't successfully market and sell. How did I come to this conclusion? Observe Exhibit B:

"Which ones are 'next-genable'"

Earlier in the interview Steinberg talked about the development costs of some next-gen titles reaching the $15 million mark. Despite the fact that Shenmue's assets are purportedly already complete, developing a game and releasing it during the next-gen business cycle is a scary proposition for a franchise that hasn't exactly been a gold mine for the company.

So what exactly is the deal with Shenmue III, and is it ever going to ship? I took the liberty of doing a little research and found some exciting news via Kikizo. In August 2005 Kikizo conducted an interview with an anonymous source close the project who told the publication Shenmue III was virtually done.

"Under conditions of strict anonymity, sources close to the development of Shenmue 3 revealed to Kikizo that the project has essentially been close to finished and 'ready' for some time - but in hibernation, pending a deal for the entire series on at least one next-gen console. Kikizo's source is authentic and reliable."

According to the source, Sega and AM2 have been sitting on the project until a preferable deal for the series is reached. The story has been finished for years and "the texture and modelling work is ready, they know what their characters look like and there's hundreds of gigabytes of [uncompressed] textures. Game designs are done. There is no more research to be done. It's a matter of 'porting' to whatever [console]."

Kikizo again scored an interview recently with Yu Suzuki - I may have to send those guys a fruit basket for providing me with so much Shenmue III info - in which Suzuki said, "the story will be finished through games."

So if the game is basically ready, the creator of the series has confirmed its completion through the gaming medium, and there's a decent enough fanbase in Japan to support the title, then when and on what platform will Shenmue III be published? Brash Gamer's money is on the Xbox 360 in 2007. In an ideal world the deal would work out fantastically for both sides. Microsoft would have a marketable Japanese title to push sales in Japan, and Japanese gamers would finally have the conclusion to Suzuki's epic story. The question is will it actually happen?

The answer is unfortunately no. Microsoft and Sega have gone down this road before with Shenmue II on the Xbox, and it didn't have an effect on either party's profit margins. The Xbox continued to sell as often as John Mayer albums in Compton, and because of the Xbox's tiny installed base Shenmue II sold fewer units than its host platform. With the DS Lite selling 15x the amount of units as the Xbox 360 in Japan, Shenmue isn't a big enough franchise to rescue Microsoft's second failed effort in the land of the Rising Sun, and Shenmue III is more likely to end up alongside Duke Nukem Forever in the all-time vaporware list than on retail shelves.