A famous actor Norman Reedus, who played Sam Bridges in Death Stranding, was interviewed by the Brazilian side of IGN. During a conversation with reporters, he probably blabbed about the beginning of the development of the sequel. He did not say unequivocally but did mention some negotiations - probably between Kojima Productions and Sony.
Reedus said that he “thinks” that the game is under development. It is unlikely that Norman was referring to the extended edition of the original Death Stranding because there is very little time left before its release and it is going through the last stages of testing. Therefore, it is possible that Kojima really wants to continue to develop the universe of his new franchise. Despite the story of the original game looking quite finished, the title became very popular and has a lot of fans who would like to see a continuation of the series or at least some lore expansions.
In October 2020, Hideo Kojima announced that the team had already started developing a new project. The game designer is ready to attract the best employees to it. And a year before that, he was already talking about a potential sequel. If it does, then a different story is expected there and, possibly, even new gameplay. Nevertheless, summarizing it with Reedus' words, Sam Bridges will feature this new different story. Nevertheless, he may become a minor character or just a cameo.
Kojima Productions is currently finishing the new director's cut version of the original game for PlayStation 5 which will be available on September 24th. The updated version will include new story missions, fresh gameplay mechanics, and other bonuses, including some items from such franchises as Half-Life and Cyberpunk 2077. According to Kojima’s Twitter posts, he doesn’t like the “Director's Cut” name as his original titles weren't cut and new versions will feature new features that weren’t planned to be included primarily.
Before this latest news, there were a lot of rumors that Hideo Kojima and Microsoft were planning to develop a new project using cloud technologies. However, it can’t be a Death Stranding sequel as all the rights of the franchise belong to Sony. In this way, Kojima's studio won’t work on the sequel with Microsoft as it’s not possible by the law. Does it mean that Hideo will develop several projects simultaneously or was it just rumors and there is no relationship between Kojima and Microsoft? It isn’t clear as there is no official information or announcements yet.