Although we don't yet know if it's a whole new game or an updated version of the first fighter, a new Persona 4 Arena title is in the works.
Translating from a Famitsu report, Gematsu and Shoryuken called the new game a sequel, but Siliconera was less confident, noting that it's not clear whether the game will release as a stand-alone product or an add-on for Persona 4 Arena.
What all reports agree on is the addition of at least two new characters to the roster - Yukari Takeba and Junpei Iori, both from Persona 3. The two characters have been redesigned for the Persona 4 spin-off, because of the time lapsed between the events of the two games.
Developer Arc System Works has begun testing the updated fighter in two locations in Japan - Hey Arcade in Akihabara and Taito Station Nihombashi, where the fighter will be on show for two days. A translation of Famitsu's impressions has Yukari down as a speedy character who uses a bow and wind attacks, while Junpei is more power-focused, wielding a bat and baseball-themed attacks.
No direct assets have been released yet, but Famitsu has a collection of off-screen photos.
Persona 4 Arena is a versus fighter using characters from Atlus's popular RPG series Persona, itself a spin-off of Shin Megami Tensei. It's available on PlayStation 3 and Xbox 360.