Like the previous Shenmue games, the player controls teenage martial artist Ryo Hazuki, who is searching for his father's killer. Most of the game is spent exploring the open world in Guilin, China, searching for clues, examining objects and talking to non-player characters for information. The game features a 3D fighting system similar to the Virtua Fighter series; Ryo can practice moves to increase their power. In quick time events, the player must press the right buttons at the right moment to succeed. Ryo can earn money through minigames such as fishing, chopping wood, and forklift driving, and by selling foraged herbs.
Plot
In 1987, teenage martial artist Ryo Hazuki has journeyed from Yokosuka, Japan, to the mountains of Guilin, China, in search of his father's killer, Lan Di. Ryo and his new friend, Ling Shenhua, search for Shenhua’s missing father, stonemason Yuan. They learn that thugs have been harassing the local stonemasons, looking for the phoenix mirror, which Ryo has brought from his father's dojo. Another stonemason, Xu, is also missing. Ryo defeats two of the thugs, but is defeated by their boss, Yanlang.
Ryo learns that Lan Di's father, Sunming Zhao, visited Bailu Village with Ryo's father to train under the grandmaster. Zhao died under mysterious circumstances several years later. Ryo also discovers that the phoenix and dragon mirrors were created by Yuan’s grandfather at the request of the Chinese emperor. Their creation is connected to the local Verdant Bridge, constructed to honor the visitation of a Chinese envoy.
Ryo discovers the thug hideout, but is defeated again by Yanlang. He convinces Sun, a local martial arts master, to teach him a powerful Bajiquan move, and uses it to defeat Yanlang. A village elder helps them discover a map to the treasure connected to the mirrors. Ryo fends off an attack from Lan Di's henchman Chai, who reveals that Yuan and Xu have been taken to the city of Niaowu.
Ryo and Shenhua travel to Niaowu by boat. Ryo learns that a local gang, the Red Snakes, is holding Yuan and Xu. As he searches for them, Ryo encounters Ren, who is still desirous of treasure. Ryo is eventually lead to the Red Snakes’ hideout, but he is defeated by their boss, who uses a unique, animalistic fighting style. With Ren’s help, they try to defeat him but lose again. Ryo meets a cormorant fisherman, Grandmaster Bei, who tells him that his kung fu is lacking. In turn, Ryo trains, learns the boss’s fighting style, and convinces Bei to teach him a helpful Bajiquan move.
Ryo approaches the hideout with Ren only to find Li Feng, a mysterious woman whom Ryo has encountered several times in the city. Ryo soon discovers that Shenhua has been kidnapped by the Red Snakes and taken across the river to a fortified castle; she will be released only if he brings them the Phoenix Mirror. Ryo convinces Bei to take him and Ren across the river by boat. Before departing, Ren reveals that he previously purchased a counterfeit Phoenix Mirror in one of the local shops, believing it could be useful.
The three cross the river with both Hsu, a former student of Bei, and Lin Shiling, the maiden of a local Buddhist shrine. Ryo and Ren infiltrate the castle while the others guard the perimeter. Ryo finds Yuan and Xu trapped in a cell; after defeating Chai a second time, Ryo releases them. They next encounter a woman resembling Li Feng. In reality, Feng is a disguise of Niao Sun, another Chi You Men leader. Ryo gives her the real Phoenix Mirror to save Shenhua, and Niao Sun tells them Lan Di is up ahead.
Ryo and Ren fight their way to the top of the castle, defeating the Red Snakes’ boss in the process. They find Lan Di, along with several body guards, sitting in a room at the top of the castle; Ryo challenges him to a fight, however Lan Di quickly and effortlessly defeats him. Ren offers Lan Di the fake Phoenix Mirror in exchange for Ryo’s life. Thinking it to be real, Lan Di accepts, but Ren hurls the mirror out of a window. As they were fighting, Niao Sun ordered her men to burn the castle in order to kill Lan Di and consolidate her power. Surrounded by flames, Ryo and Ren escape the castle while Lan Di continues to stare out the window. Niao Sun escapes, still possessing the real Phoenix Mirror.
Ryo, Shenhua, Ren, Yuan, and Xu depart Niaowu by boat. Yuan reveals that the mirrors were initially locked away in a cliff temple; Zhao Sunming took and protected the mirrors. After Zhao died, his son, Longsun (Lan Di), was raised by the Chi You Men. While being held captive, Yuan also learned that the Chi You have taken over the Cliff Temple, believing it to be the location of the treasure. The final scene shows Ryo, Shenhua, and Ren crossing the bridge and continuing their journey along the Great Wall of China.
