Sega has announced Shenmue Online, an action MMORPG that the company is co-developing with South Korean developer JC Entertainment. Shenmue mastermind and Digital Rex president Yu Suzuki will serve as the project's executive producer. The 2.85 billion yen ($25.75 million US) title, which has been in development for a year and a half will enter its closed beta testing phase this November, followed by an open beta test next year. Along with Phantasy Star Online Blue Burst, it will also be a key title in Sega's line-up for the Chinese market. The newly established Shanghai-based Sega of China will work closely with local companies on the various online titles to be released in China.

Shenmue Online will be available in China and South Korea sometime in 2005. Sega has yet to outline its plans for the Japanese and North American market.