Remedy franchise boss Oskari Hakkinen has said the developer still can't "confirm" an Alan Wake sequel, with Microsoft apparently wanting more DLC episodes for the original first.
Speaking to IGN, Hakkinen said, "Microsoft are throwing the idea around of more episodes, but... we're a small team.
"We wouldn't really be able [to create more episodes] -- if we were to confirm a sequel at some point, which we'd like to do relatively soon."
Hakkinen said that although Remedy is confident the first episode will go down well with fans, the studio was just going to wait and "see how the attach rate" goes before anything else is decided.
Remedy, though, seems very keen to get things moving, with Hakkinen saying:
"We're in a limbo at the moment where neither of us are talking about it. Microsoft have an option for it. That was in the deal a long time ago… and I don't see why they wouldn't. We're happy with the partnership and they're happy with the game.
"I think it fits in their portfolio quite nicely. I don't see any reason why we wouldn't continue with Microsoft and why we wouldn't renew the IP… We definitely want a sequel, of course."
Finally, Hakkinen said that if the studio was to start production on a sequel, it would probably only take around 18 months.
"Max Payne 1 took us also five years to make. Max Payne 2 took us 18 months. I think we'd be looking at something of a similar cycle."
Episode 1 of the new DLC for Alan Wake, named The Signal, will be released on July 27 for 560 MS points or for free if you bought the game at release. Episode 2 currently has no date.