Famed Final Fantasy creator Hironobu Sakaguchi founded the Mistwalker studio with financial backing from Microsoft.

The studio released two great JRPGs on Xbox 360 - (2006) Blue Dragon and (2007) Lost Odyssey.  The latter played as a spiritual successor to former Final Fantasy games.

After this, Mistwalker has released a few DS games, The Last Story on Wii, and more recently moved into iOS games.

Given the last Xbox 360 game was in 2007 one can only assume that Microsoft stopped backing Mistwalker after Lost Odyssey.  Is there any chance we'll see a Lost Odyssey 2 during the 8th generation?

Well if Terra Battle is downloaded enough there will be a console version created.
http://www.terra-battle.com/en/downloadstarter/
Now if only they would release the Android version here in Australia =(

It's over for them ...

They'll likely be stuck making phone games for good until studio closure ...

Oooh, how Sakaguchi has fallen so low from being the creator of Final Fantasy to making iOS/Android games ...

I'd rather have The Last Story 2 first, but unfortunately they seem to be very focused in the mobile market right now, though like ktay95 says, a Terra port for consoles could be done, and that would represent the return of the studio to the console world. Who knows, maybe they are already doing something big for consoles.

Lost Odyssey was indeed great but Blue Dragon was pretty average the only thing great about it was the music. But pretty much any game that has music that is composed by Nobuo Uematsu has great music. Probably would have liked it a lot more if I was a fan of Akira Toriyama but I never got into Dragon Ball or Dragon Ball Z.

Unless Nintendo buys them like they did Monolith or MS or Nintendo or Sony fully funds a RPG I think Mistwalker is done with console games not counting mobile phone ports.

I wish Nintendo would fund The Last Story 2 for Wii U.

This is a Studio I think Nintendo should pick up, believe it or not. Last Story was a well received game and having Mistwalker would give them another RPG maker of yet another style. And this would be a cheap pickup compared to any other options. And also they have experience with handheld and console style games and are familiar with the PowerPC architecture Nintendo likes to use. Not to mention it would be one more celebrity to add to their roster of heavy hitters.

They need the funding of a publisher to make a new one. They also need a developer because mistwalker is more of a supervisor than a developer.

None of their titles received critical acclaim or did well in terms of sales... so its a difficult battle for them. That is why they required Terra battle to do well.

I think he will be back to Square-Enix at some point. Unfortunatelly he commited one big mistake that almost closed Square: Final Fantasy The Spirit Within.