A Sunset Overdrive sequel might still happen, but for now the franchise remains inactive, according to Insomniac president Ted Price.
When asked by Game Informer why there has yet to be a follow-up to the 2014 Xbox One exclusive, Price replied, "You’d have to ask Microsoft."
"We are passionate about that franchise, and we own it, so you may see more Sunset in the future from us," Price continued. "No promises, and no timeline to speak of, but it is something that represents our willingness to create unexpected experiences."
Source: IGN Video Games
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