Shenmue III was originally planned to be developed for the Dreamcast but due to the dwindling sales of the console and its games and the huge losses Sega incurred between 1998 and 2001 (at 2001 losses hit an all-time low of approximately 51,750,000,000 Yen) it did not seem financially viable for Sega to develop a sequel to a game that cost $70,000,000 for a console that was no longer profitable. However, of the $70,000,000 budget the developer had spent the budget on all the research and resources necessary to create all the further installments of the Shenmue saga, in fact the Shenmue story was already finished and planned out, the research for all further titles is complete, all the character design is complete and there are still many hundreds of gigabytes of uncompressed textures ready to be ported for development on any console the developer would be creating Shenmue III for.
Over the years since Shenmue II it has been stated that development on Shenmue III has begun or was to begin multiple times and Sega have given fans reason to believe a sequel may still happen, they have revamped the shenmue.com website, talked about Shenmue III and posibilities for the future of the series during development for the now cancelled Shenmue Online and have included the series main character Ryo in the 2009 game Sonic & Sega All-Stars Racing.
As of 2010 representatives of Sega have stated that though there is clearly a fan-demand for Shenmue III they don't have any plans for Shenmue at this time. On the 3rd March 2013, Yu Suzuki said at a Monaco game show, that he wants to crowdfund a new Shenmue 3 game.
Picture 1: Old Man: "You say you know Master Lishao Tao?"
Picture 2: Old Man: "If you remember, Rakousei was attacked by an enemy/group. I think this must be the reason"
Picture 3: Ryo: "Is - this place here where you keep things of Rakousei?"
To date as of 2014 no information on who Rakousei is. The Old Man has been founded in the Shenmue 2x files and appears as a VMU icon when you pop in the Dreamcast Shenmue 2 first disc in. He appears under the name "OSY".