Due to failure to prove use of the trademark, Sega has apparently lost the rights to the Shenmue francise. This was indicated on the Shenmue USPTO page, which stated that, “Registration cancelled because registrant did not file an acceptable declaration under Section 8.”
Usually, there’s a small window of opportunity provided to trademark holders prove their use of the trademark. Trademark holders have to prove use of the same during the fifth and sixth years, along with during the ninth and tenth years of the trademark’s existence. At the very least, it seems that having Ryu Hayabusa in Sonic and Sega All Stars Racing Transformed wasn’t a good enough reason.
The last real Shenmue game to release was Shenmue II, which came out in 2001 for the Xbox and Dreamcast. Shenmue City was released for mobiles but failed to catch to on, leading to its cancellation. What’s Sega’s next move for the franchise? We’ll need to wait for an official update to find out.