Yu Suzuki, has just announced on the Shenmue III kickstarter page, that the game will be set right after Shenmue II , and will let players play through chapter 5 and 6 out of the 11 chapter story arc. Hopefully a HD remaster of the first two games will happen before the 3rd game comes out, as it has been a lot time since Shenmue I and 2 were released. If not you can always pick up a Dreamcast or watch videos on YouTube.
Source:PushSquare
