The player controls the teenage martial artist Ryo Hazuki as he arrives in Hong Kong in 1987 in pursuit of his father's killer.

Shenmue II sold poorly and further games in the series entered a period of development hell lasting over a decade.

Most of the game is spent exploring the open world, searching for clues, examining objects and talking to non-player characters for information.

Players can ask for directions from passersby, and fast-forward the game clock when waiting for a scheduled event to occur, such as a shop opening or character arriving.

[1] Unlike the first Shenmue, taking a job is not part of the main story, and the player can choose how to earn money—for example, by gambling, arm wrestling, street fighting or running a pachinko stand.

[1] Ryo can spend money on items such as capsule toys or 1980s arcade games including Hang-On,[2] After Burner,[1] Space Harrier and Out Run.

[3] The Dreamcast version allows the player to import their save data from the first Shenmue, transferring money, items and martial arts moves.

[4] In 1987, the teenage martial artist Ryo Hazuki arrives from Japan in Wan Chai, Hong Kong on the trail of his father's killer, Lan Di, of the criminal Chi You Men organization.

He searches for Master Lishao Tao, the only link to the whereabouts of Yuanda Zhu, a martial arts expert who sent Ryo's father a letter warning him of Lan Di's intentions.

Ren informs Ryo that Zhu is hiding from the Chi You Men in Kowloon Walled City, a densely populated, crime-ridden enclave of Hong Kong.

[9] The Dreamcast version was not released in North America, where Microsoft Game Studios secured console exclusivity rights for Shenmue II on Xbox in October 2001.

[4] The Xbox version features an additional camera mode, optional filter effects, improved frame rate and lighting, and English-language voice acting.

[12] The remaster include updated graphics and control options, improved user interfaces and Japanese and English voices.

IGN praised the story, but criticized the English-language voice acting and found the graphics lacking compared to other Xbox games.

[39] In June 2015, he launched a successful Kickstarter crowdfunding campaign to develop Shenmue III with Ys Net for the PlayStation 4 and Windows, having licensed the rights from Sega.