The creator of Shenmue, Yu Suzuki, has described the game as a whole new genre called FREE (Full Reactive Eyes Entertainment). The object of the game is not only to complete it but to become immersed in the game and enjoy being part of it. This parallels what many people consider what you should do in life, enjoy the ride.

The game itself has been setup from the begining as chapters, each installment of the game has as few as one chapters to as many as four.

The plot starts as you (Ryo Hazuki) come home to find that a mysterious man is confronting your father, he is asking something about a mirror. As you approach it turns out that the man (Lan Di) and your father are about to fight. The result of the fight puts things into motion that you cannot ignore. Thus the saga begins.