Shenmue 3 on the way?

File this in the "tenuous" drawer. Reports are going around that Microsoft Game Studios Japan have signed up Gargoyle Mechanics to produce Xbox 360 games.

Gargoyle is made up of, amongst other things, a bunch of folk who worked on Dreamcast titles, including the legendary Shenmue titles.

As I said, possibly tenuous, but a good number of people would see Shenmue 3 as somewhat of a killer app for Xbox 360 if the rumor turned out to be true. Myself included.