this is good news indeed. im a huge fan and wanted to know what happens next sooooo bad after shenmue 2's cliffhanger ending. i was worried that it would go to ps3 and i wouldnt be able to finish it.
i dont see any reason why they would use the old engine?? they already have the story, art, direction, gameplay mechanics, and basically everything they need but the technology to apply it to. i think its a great idea to put all 3 together, i just hope they dont require you to play through the first through to get to part 3 of the game. although if it looks half as good as i think it will it may be worth playing through just to see the eye candy