Arcade?
Oh yes. Fully interactive it is too. In the demo you get to play on a fruit machine, and also Sega Darts. The full game will allow you to have a go on Hang-On, Out Run, Space Harrier and the like, all faithful reproductions of the arcade originals. If you get a decent score you'll be able to post it on the Shenmue website using the Dreamcast modem. Cheeky? We think so.

So do I. But what about these Dragon's Lair-style bits? I heard that all the fighting will be handled in that way.
There are some Quick Timer Events (QTEs) which are similar to Dragon's Lair, but they work really well. We found two in the demo - a fight and a chase - and they were a right laugh. Left... Left... Right... A... Left... Right. That translates on-screen as "Dodge fat bloke... spin past fruit stall... avoid oncoming cyclist... jump over dustbin... knock pretty girl onto her arse (pick her up again)... nip around corner. Wonderful, isn't it? Very cinematic. But that's not all there is to it. Shenmue will also feature a 'free battle system' with punches, kicks and combos galore. Bearing in mind that Yu Suzuki created Virtua Fighter, you'll have some idea of what's in store. It probably won't be quite as complex though.

It sounds like the perfect game.
You don't know the half of it. Come to think of it, neither do we. Expect a more complete preview when we get a copy of the full game. Don't hold your breath though - after spending five years and all that dough, Suzuki-san isn't about to just rush out an unfinished product. And who can blame him? Barring any major problems, Shenmue could well be the most important game since Space Invaders.