Yu was approached to participate in the project, and has taken up the role of General Producer for its development. He will be working on the game together with virtual reality company JPPVR Corporation, a company that sell VR rigs for arcades, and their software development subsidiary company VRes.
Yu explained that some of the reasons for his involvement include his extensive background in developing arcade games at SEGA since the early 1980s, as well as his interest and experience in Virtual Reality (he made reference to some involvement in VR around 1991 - perhaps not coincidentally this was the period when the Sega VR headset was under development, although it didn't make it to market).
Yu also mentioned that one of the reasons he agreed to become a part of this project was because he wants to help "liven up" the arcades.
The working title for the new game is VRSUS (pronounced "versus"), a play on the nature of the game being a one-on-one battle in a virtual reality space, and a prototype has already been developed.
A demonstration of an actual battle was also given using the prototype. The two players were equipped with a VR headset suspended from overhead arms, and held position-sensing controllers in their hands that allowed them to fire a stream of ball-like missiles.
Here is a short clip of the prototype of the game:
Video
Video of the presentation (mainly in Japanese) can be viewed on Niconico.
Shenmue III
Regarding any potential effect on Shenmue III, the short answer is that there will be none. Shenmue III remains Yu Suzuki's priority and focus, as succinctly stated here by Ali on the official Shenmue III Ambassador account:
This new Esports VR game is just a PROTOTYPE with no final name, release date, etc as of now. Shenmue III is priority. With release date set for 27th August 2019 already: https://t.co/d8wCY1ZzEB— Shenmue Ambassador Official (Nov)🌐 (@novinworksplus) September 20, 2018
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