Platinum Games director Hideki Kamiya has reportedly said he would prefer to make a third Viewtiful Joe instead of a Bayonetta sequel.
When asked whether if he given the chance to make a sequel to either IPs, he stated that he'd rather create a sequel to Viewtiful Joe instead.
That said, discussions regarding a Bayonetta sequel or spinoff is carried out by the director when talking with, while drinking beer, Bayonetta's producer.
Bayonetta 2 rumors -- including speculation of the game being canceled -- has been circulating ever since the original's launch. As for what its studio is working on now, Platinum is currently developing Metal Gear Rising: Revengeance, as well as Anarchy Reigns.