When Ubisoft released Beyond Good and Evil it soon became apparent that the French developer had struck gold. The game, released in 2003 and designed by the now legendary Rayman designer Michel Ancel, got released to rave reviews when the game made its debut on the Nintendo Gamecube. While the game managed to garner a loyal following in addition to great reviews, the game was a commercial failure. This didn't stop fans of the game asking Ubisoft when to expect a sequel at every chance they got, but the only thing fans got as a response when asking the developer directly was that the game wasn't canned.
And now the conversation got started up again when Destructoid reported on a rumor they received last week from the same guy whose publication published a rumor by Geno, an anonymous industry insider, about Nintendo's elusive NX console. While an anonymous source should always be taken with a gigantic grain of salt, Geno has been right before. The source was already responsible for leaking new Pokemon as well as Microsoft's Illumiroom before their official announcement, so it could very well be that this person knows what he's talking about. Destructoid went out to find an additional source, and this person has also confirmed many of the points Geno brought up, lending an extra layer of validity to the rumor. The fact that Tim Schafer and Michel Ancel kept mentioning Shigeru Miyamoto during a stream where they played Beyond Good and Evil might be a bit anecdotal, but in the context of this rumor it does make sense.
The rumor goes as follows: according to both sources, the game is currently in development under the working title Beyond Good and Evil: The Prejudices of Philosophers, which references Friedrich Nietzsche's book Beyond Good and Evil, a book that criticizes philosophy's outlook on what constitutes good and evil.
According to these sources, Nintendo is secretly funding the development of the sequel to secure it as an exclusive for the as of yet unannounced Nintendo NX console. Note that Nintendo did something similar with Bayonetta 2, which was the sequel to a game that wasn't a commercial success but garnered a pretty big following after release. Repeating the same trick and getting the sequel as an exclusive might go a long way to ensure that the NX doesn't have the same start (or middle. Or end) as the Wii U.