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shikamaru317 said:

Saw that yesterday. Kind of pisses me off that MS still hasn't funded a sequel after 3 years. Sure the first game wasn't a big seller, but that's partly because of the poor release window, they released it in a crowded Holiday when the install base was still pretty low. A sequel would almost certainly sell better, especially since the Games With Gold release allowed about 1m extra people to experience the first game, many of whom enjoyed it and would buy the sequel most likely. Just adjust the budget based on how well the first game sold so that the sequel will be profitable as long as it sell at least as many copies as the first game sold. 

I honestly don't know if Insomniac will ever find a publisher for SO2 now, they want to own the IP themselves and MS was the only publisher who would let Insomniac maintain ownership of the IP originally. If MS won't fund a sequel, I doubt any other publisher will either

If they can't turn it into a service, with microtransactions, they aren't interested.