Spong is reporting that development on Bayonetta 2 has been cancelled by SEGA.
According to the site, “Bayonetta 2 has been cancelled, following the publisher’s ongoing restructure.”
Developer Platinum Games had never officially announced the game, so it’s difficult to tell how far it was into development.
Apparently, the sequel was due to “include a new character, in the form of a member of the US military,” so based on this we at least know that the game was at least at the planning stage.
SEGA has replied with a firm “No comment” in respect of this rumour.