Models and animations look like it was meant for the PlayStation 3. Hmm... Will need to wait until they show another video after a few more passes before I can really give any valid opinion though. I feel like we were supposed to treat this as none of this will be going into the final product as is.

Relating animation quality to platforms doesn't really work, motion capture gave Link some nice looking animations in Ocarina of Time though i'm sure there are older examples, i'm blanking on great examples of facial animation in the PS2 era (in-engine) so i'll only go back as far as Half Life 2, which came out the year before the previous generation of consoles.
The beefy looking guy Ryo is fighting is definitely supposed to look like a cartoon, if they're adopting an "art style" for this game it's not reflected in the environments or by the other characters, this project may need some help.
I'm a Shenmue fan and a backer of this game, i hope it comes together... or that it doesn't scare Sega away from releasing HD versions of the first two...

I remembered being impressed with the Pierce Brosnan they did for Nightfire on the PS2 and watched a video; I think they're going for something stylistically here rather than technological. I mean the PS2 was actually able to pull off animations like that, never mind PS3. They were able to pull off pretty good face mapping back a generation earlier.

That said, I hate their choices for Shenmue 3, if they are representative of the actual: The Dreamcast version has the same cross-eyed look for Ryu, as well as the "I hate the world" almost-fist-like hands at all times. The environments back then looked wonderful; their making these ones evolve with the technology is incredibly jarring with the cartoon style for the characters. Y YU DO THIS?