I'll tell you this right now, this might piss some people off so before you continue reading I advise you to keep your shenmue defense in check before replying with posts such as "no thats a terrible idea, your an idiot blah blah blah" this is just my honest opinion on not just the engine (hell its more me explaining the background of Unreal Engine itself) I have limited experience with it myself, but even the development of Shenmue 3 itself tied in with Unreal Engine 4 is not suited in my opinion. I think the opposite of Yu and recent interviews have got me concerned that this was not the way to make this game especially with a low budget game being madr by a small but experienced company being YsNet.
This free engine made by Epic Games is wonderful for people to create their own games across multiple platforms in this day and age, with good knowledge of coding written in C++ it can be a great tool. If you take a look at the types of games made by this engine, it has been well recieved and has done well in regards with both game design and gameplay, it is without question that the FPS genre triumphs with this sort of engine howver, take a look it is very well suited towards these games; Gears of War, Bioshock, Unreal Tournament 3. All perform very well as FPS games on this engine.
Now lets take a look at what it really has to offer. Unreal Engine 4 being the 4th iteration of this engine is obviously better than the previous versions with the main thing being it's support with today's current gen PC and Console games. With more stability updates constantly being released even now to improve certain aspects of the engine. Now that Shenmue 3 is using the engine and is taking advantage of the "open world" where for a Shenmue game as Yu Suzuki states himself "can offer that great Shenmue feeling with vivid colours and shaders" obviously similar to the atmosphere of the dreamcast games is what the aim is, but to a higher extent that has a modern take being HD graphics that weren't present or as detailed with technology 17 years ago.
I feel as though as great as this engine seems to be, it is not right for Shenmue, from my take on this is that there is going to be fluffs in the design when its finished. Yu Suzuki explicity stated himself its difficult for him to use.. sure he has NoconKid and the old team back but if Yu's previous knowledge as well as the old designers were to use what they had previously on old technology, the game would be more well polished. The fact that this game is happening is amazing but Yu's ambition is a bit farfetched and he needs to see that he needs to suit his expectations accordingly because theres not much time left, there could be more delays but development would either be too short or too long. We don't exactly know and that's just a little concerning.
Do not be suprised if what you expected from Shenmue 3 turns sour. It is difficult and theres nothing I could possibly do to help this and I'd really like to, I think about it a lot but Yu has decided to used Unreal Engine 4 and thats that. The simple message that I really want to get across is that using old technology from Shenmue 1 and 2 on Dreamcast would be more "APPROPRIATE" than modern "Unreal Engine 4" because despite being old, it's quality will be in line with the first two games despite being backwards in comparison to other games.