Shenmue Development Timeline (May 1998 - Dec 1999)

Most Shenmue fans already know the broad story of the game’s development: the early demos, the ever-extending release date, and the rumors in games magazines suggesting that SEGA was aiming for something far bigger than anything it had attempted before.

Below is a timeline translated from the Shenmue Complete Guide book, which was published in Japan not long after the first game’s release. It reflects how Shenmue’s development was being presented and discussed at the time, before years of retrospectives and post-mortems filled in the gaps. Much of this information will be familiar to longtime fans, but it still serves as a handy snapshot of those busy Dreamcast years and how key milestones slotted into place.

I’ve also inserted relevant videos at a few points along the way where they help capture what players were seeing at the time as Shenmue gradually took shape.

21 May '98

DC Demo: "Tower of Babel"

At SEGA’s Dreamcast unveiling event, one of the demo videos shown was Tower of Babel, created by Yu Suzuki in just 10 days. In retrospect, this can be seen as a precursor to Shenmue.

• Tower of Babel Demo Video:

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Poll Result: Patrons' Choice Topic for December 2025

Every month Phantom River Stone holds a poll among our patrons to choose a topic for the blog in the coming month. After tallying the votes (including accumulated votes from previous months), the winning topic that has been voted this time is:

"Interview: Toei Director Kazuya Murata's Experience Working on Shenmue II"

In interviews, Yu Suzuki has mentioned that, in order to realize his vision for Shenmue, he needed help from people who didn’t even exist in the game industry yet:

“We didn’t have directors, or anyone used to motion capture… so I gathered people from all kinds of fields: movie staff, scriptwriters, even a novelist.”

One of those outside voices was anime director Kazuya Murata, who joined the Shenmue II team around 1999 and found himself navigating a development floor unlike anything in traditional animation.

Best known for his work on major anime titles like the world-wide hit Fullmetal Alchemist and the internationally popular Code Geass, Murata stepped far outside the usual animation pipeline when he joined Yu Suzuki’s team midway through Shenmue II’s development. The shift from anime studios to a bustling game production environment brought a whole new set of challenges, from motion-capture sessions to experimental 3D cinematics.

In a 2019 interview, Murata shares what that transition was like and how he adapted to a creative process very different from the one he was used to. His recollections about working with Yu Suzuki and team shed light on a moment when anime and game production intersected, bringing both new opportunities and practical hurdles.

Coming soon to the blog!

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Shenmue’s Road to Release (Shenmue "Complete Guide" Feature, March 2000)

Not long after the release of Shenmue ~Chapter One: Yokosuka~, the Shenmue Complete Guide, with its distinctive black cover, was published in Japan by SoftBank under the Dreamcast Magazine brand. Included in this guide was a special in-depth feature that looked back on the game’s ambitious development.

In this post, we will be translating the full piece into English. It's a fascinating glimpse into how Yu Suzuki and his AM2 team transformed an experimental RPG prototype into what would become one of the most groundbreaking titles in gaming history.

The translation begins below.

A Year and a Half Following Shenmue

AM2, Sega’s most powerful development team, has produced countless hit games. But around the end of 1996, its head, Yu Suzuki, began to go quiet. Spurred by a shift in direction within Sega, Suzuki took on the RPG genre for the first time. As he became more and more immersed in his new project, before anyone realized it, it had grown into a massive undertaking involving an extraordinary number of staff members.

What would become Shenmue ultimately took over four years to complete. But the Shenmue you hold in your hands is still just the beginning.

What exactly is Shenmue? We take a closer look to find out.

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Poll Result: Patrons' Choice Topic for November 2025

Every month Phantom River Stone holds a poll among our patrons to choose a topic for the blog in the coming month. After tallying the votes (including accumulated votes from previous months), the winning topic that has been voted this time is:

"Weekly AM2: Translation of Next Issues (Vols. 15 & 16)"

The topic selected this time is a continuation of our translations of the official online magazine published by Sega's AM2 team back in the day, the Weekly AM2. This magazine published content about the Shenmue series from December 1999 through to around the release of Shenmue II in 2001, and a link to issues of the Weekly AM2 thereafter became a regular feature of the Shenmue.com website.

This time we will be translating further editions of the Weekly AM2: Volumes 15 & 16, published online on 21st March and 28th March 2000.

Vol. 15 Preview of Shenmue-related content:

• Shenmue Passport Feature Commences: Total Net Ranking
• GDC Report from the U.S.A.

Vol. 16 Preview of Shenmue-related content:

• Takuan's Dobuita Visit Report (First Part)
• Wallpaper Download
• Japan Game Awards Announcement
• Masaya Matsukaze's Consultation Column
• Shenmue Chapter 1 Yokosuka Original Sound Track

These editions will be translated in a future post on the blog.

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Megumi Yasu Photoshoot - Nozomi Harasaki Cosplay | Dreamcast Magazine, March 2000

The March 2000 edition of Japan's Dreamcast Magazine featured cosplay by Megumi Yasu, the voice actress who portrayed Nozomi Harasaki in the Japanese version of Shenmue. Along with the photos, the feature included a brief Q&A section.

Megumi Yasu recreates one of the CG renders of Nozomi at her shop.

AI animation based on the magazine still.

Note: the photos in this post have been extracted from a pdf scan of the magazine, so quality is limited. Some of the photos have also been processed to remove overlaid text.

 -- The article translation begins below --

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Poll Result: Patrons' Choice Topic for October 2025

Every month Phantom River Stone holds a poll among our patrons to choose a topic for the blog in the coming month. After tallying the votes (including any carried over from previous months), the winning topic this time is:

NHK documentary "Making Of Shenmue" Recap

In July 1999, Japanese broadcaster NHK BS2 aired the first episode of its new Network Jungle III documentary series. Each installment explored how digital technology was reshaping Japan’s creative industries at the turn of the millennium. Episode One was called A Vision of the Future - A New Digital Era and focused on Sega’s legendary producer Yu Suzuki and his most ambitious project to date.

The NHK production crew followed Suzuki and the AM2 team inside Sega’s development studios over a period of six months, giving an unprecedented look at game creation on a cinematic scale. Viewers saw programmers tweaking lighting and weather systems, motion-capture artists digitizing martial-arts movements, and an orchestra recording the game’s sweeping score. NHK framed it as a glimpse into a new kind of entertainment: part film, part interactive world. The episode’s closing subtitle put it plainly: “A game that plunges you into a world of another dimension.”

Later that year, and still before Shenmue's eventual end-of-year release, the Japanese gaming magazine Dreamcast Magazine published a special feature about the game's development that was closely based on this broadcast. It reused stills and quotations to turn NHK’s televised documentary into a richly illustrated print feature. While the show itself aired only once, the magazine preserved its tone and stirred further anticipation for a title that promised to redefine realism in games.

In the upcoming post, I’ll be sharing a full English translation of that magazine article, together with stills recaptured from the NHK documentary. Together, this will reveal how Shenmue was presented to Japan, as a milestone in digital culture in 1999.

Coming soon to the blog!

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Anecdotes & Insights - The Spirit of Shenmue Lives On | Famitsu Dec 2024 [Part 6]

In this post, we present the final part of our English translation of Famitsu’s 25th anniversary roundtable with the original Shenmue developers. In Part 5, the team recounted the challenges of building Shenmue II, reflected on the long road until Shenmue III, and shared their hopes for seeing the series reach its conclusion one day.

In this final part, the discussion closes with a message from actor Masaya Matsukaze, the voice of Ryo Hazuki in the Japanese version, who shares his memories of the series’ early days and what Shenmue has meant to him. The developers then reflect on their own experiences and the lasting impact Shenmue has had on their lives, careers, and friendships.

What Does Shenmue Mean to Each of You?

—As we begin to wrap things up, we’ve received a comment from Masaya Matsukaze, who plays Ryo Hazuki. Let us share it with you now.

Masaya Matsukaze – 25th Anniversary Comment

"I have so many memories tied to Shenmue that I don’t even know where to start...

First off, let me talk about the audition. It was all extremely top-secret, and a ton of people participated. One thing that really stuck with me was being told, “Bring a personal seal (inkan) to stamp the confidentiality agreement - if you don’t have it, you’ll be sent home.” I remember thinking that was pretty strange, and also telling myself, “If I forget it, I won’t just fail the audition, I won’t even be allowed to apply, which would be ridiculous,” so I made extra sure not to forget it.

By some miracle, I passed the audition. I later heard the reason I got the role was, “We knew the production would be tough, so we chose someone who looked sturdy and had a good personality.”

A few years later, the game was finally announced with a press event at Pacifico Yokohama! After years of keeping everything confidential and working in a secret facility, without even telling my own parents, Shenmue was finally going public. But during preparations for my own appearance on stage, we ran into a problem during the costume check. Apparently, it was felt that “Matsukaze’s outfit is lame.” So at the last minute, on the night before the event, I had to run to a department store in Tokyo and buy a whole new outfit! There wasn’t time for tailoring, so the fit was a little off - that’s another memory that sticks with me.

Once, in the dressing room for the motion capture, the actor Yukijiro Hotaru said to me, “You’re still young, right Matsukaze? While you’re young, you should try everything. Later on, you’ll naturally start to weed out the things you don’t want to do, and that’s how you’ll find the path you should take.” I’ve lived by those words ever since. The advice I've received from Yu Suzuki and Hiroshi Fujioka is also something I treasure. The people I met through Shenmue have had a profound impact on who I am today.

Cancellation, then revival - when I was told “The series will be put on hold after II,” I was so shocked it felt like my heart stopped. We had already recorded so much motion capture for what came next... Then, years later, when I heard the words, “We’re making a sequel!” I was absolutely speechless. And then came the anime... Shenmue is full of surprises. You truly never know what’ll happen next. I could go on and on forever.

Oh, and speaking of which - I recently made Ryo’s leather jacket as a hobby project!"

See the full video on Matsukaze's YouTube channel

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Anecdotes & Insights - From Shenmue II to Shenmue IV | Famitsu Dec 2024 [Part 5]

In this post, we continue our English translation of Famitsu’s 25th anniversary roundtable with the original Shenmue developers. In Part 4, the team reflected on Shenmue’s enduring legacy and casually revealed that a fully playable PlayStation 2 version of Chapter One once existed but was never released.

Part 5 turns to the creation of Shenmue II, an ambitious sequel built on a rewritten engine and systems to support its larger scale. The developers also share stories from the Shenmue III era and reflect on the possibility of Shenmue IV, discussing their hopes for seeing the story completed one day.

Development of the Even More Expansive Shenmue II

—So far we've mostly been talking about Shenmue I, but were there any specific hardships during the development of Shenmue II?

Hirai: I was responsible for all the system programming in Shenmue II, but as for the other parts of the game, that was almost entirely handled by Mr. Wada.

Wada: The first game was set in a small Japanese town. You didn’t need too many people on screen, the streets were narrow and had lots of corners, so you didn’t have to draw things too far into the distance. But Shenmue II was set in a massive city, Hong Kong, so we had to show more people on-screen, and draw much further into the distance to make the city feel alive and expansive.

When we looked at that, it became obvious: there was absolutely no way to achieve that using the system from Shenmue I. I talked with Hirai and the tech team, and we ultimately decided we had to rebuild everything from scratch.

Hirai: The scripting system, the engine, even the C-language parser - we basically changed all of it. At the time, I was also involved with Space Channel 5 Part 2, so if issues cropped up, I would temporarily shift my focus back to Shenmue II to help out.

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