Shenmue has been included in several "greatest games of all time" lists. In 2006 and 2008 it was voted at numbers 81 and 63 respectively on IGN's "Readers' Choice Top 100 Games Ever" list. In 2008, it was voted number 25 on GAME's "Greatest Games of All Time" list, based on a user poll with over 100,000 votes. It was also ranked at number 42 on Empire's "100 Greatest Games of All Time" list.
Shenmue is regarded as a major step forward for 3D open-world gameplay, and considered the originator of the "open city" subgenre later popularized by Grand Theft Auto III in 2001. Shenmue was originally touted as a "FREE" ("Full Reactive Eyes Entertainment") game offering an unparalleled level of player freedom, giving them full reign to explore an expansive persistent sandbox city with its own day-night cycles, changing weather, and fully voiced non-player characters going about their daily routines. The game's large interactive environments, wealth of options, level of detail and the scope of its urban sandbox exploration has been compared to later sandbox games like Grand Theft Auto III and its sequels, Sega's own Yakuza series, Fallout 3, and Deadly Premonition.
Shenmue also introduced the quick time event mechanic in its modern form and coined a name for it, "QTE". The mechanic has since appeared in many later titles, including popular action games such as Resident Evil 4, God of War, Tomb Raider: Legend, Heavenly Sword, and Robert Ludlum's The Bourne Conspiracy.
In 2010, 1UP.com ranked Shenmue at #2 in its list of "15 Games Ahead of Their Time," citing its "ambition and scope," various "forward-thinking" mechanics such as real-time weather effects, "day and night cycles, and massive playable environments," its quick-time event mechanic, and for giving players a "living" world to explore, concluding that it "was ahead of its time in nearly every aspect of its design." In 2011, Kurt Kalata (of 1UP and Gamasutra) stated that it is "remarkable" that "years after Shenmue's release, the game's environments are still some of the best to come out of any video game ever."