Shenmue Online, recently in development at JC Entertainment-a top tier Korean online game company, has reportedly stopped work on the title. JC Entertainment has been at work on Shenmue Online since last year and was under the watchful eye of Sega who owns the Shenmue license. Reportedly the last time Sega did a progress report on the game was in March 2005. Two months later, JC Entertainment received notice that the project has been transferred to another development studio in Taiwan. No reason for the change was revealed.
Sega reported that Shenmue Online's development is being entirely managed by its Asian subsidiary Sega Shanghai Software, and the Japanese office has not received detailed information regarding its current status. While Sega of Japan hasn't officially stated that the game's development has been transferred, it has acknowledged that production has been ended at JC Entertainment.
We expect an announcement within the week to clear up details.