Since its first revelation BG&E2's development has been characterized in the gaming media by uncertainty, doubt and rumours about the game's future. On May 28, 2010, a French website claimed to have insider information of Michel Ancel leaving Ubisoft Montpellier, thus putting BG&E2 on hold. However this was denied by Ubisoft representatives shortly thereafter. Appearing at the Montpellier in Game conference on June 25, 2010, Ancel stated that the game is in development and that they are experimenting with new development practices to keep the development team small and preserve its artistic spirit. As such, the development will take "a while", but Ancel encouraged listeners to be patient
The original Beyond Good & Evil game was meant to be the first of a trilogy of games. Michel Ancel has stated that he wrote the story of the Beyond Good & Evil-universe to be longer than thumb|300px|rightwhat is included in the first game, but because of the poor sales of the original game, Ubisoft was reluctant to invest in a sequel.
Michel Ancel first gave a hint about Beyond Good & Evil 2 in an interview with Nintendo Power, where he confirmed that he was working on a new project that means a lot to him. He also talked about Jade (the protagonist from the original game) and said that he really hopes that she will continue to keep her values and her personality.
Many rumours about a possible sequel appeared after the release of the first game, all of which seemed to be false until May 2008 when Ubisoft revealed a teaser trailer for Ubisoft Montpellier's new project which featured characters and remixed music from the original Beyond Good & Evil.
Michel Ancel first talked about Beyond Good & Evil 2 being in production in an interview with the French magazine Jeux Vidéo Magazine, where he stated that the game has been in pre-production for a year, but was yet to be approved by Ubisoft. Less than two weeks later, a teaser trailer of the game, recorded entirely inside the game's engine, was shown at Ubidays. However, the game was presented only as the next project of Michel Ancel and Ubisoft Montpellier; no specific details, release date or title was announced. The trailer, showing off the highly advanced graphics of the game engine, depicts a broken-down hover-car on the shoulder of a desert road. Beside the vehicle sits Pey'j, one of the supporting characters from the original game. A woman resembling Jade, the protagonist, sits on the trunk in the background. Not much is revealed about the game itself. The Jeux Vidéo Magazine article also stated that Beyond Good & Evil 2 is under development for PlayStation 3 and Xbox 360, but this is not confirmed.
On December 18, 2008, at the VGL event in Paris, Ancel stated that Beyond Good & Evil 2 has been under development for a year and a half and that the development team have received total freedom from Ubisoft, giving them the opportunity to make the game how they want.
In an interview on March 21, 2009, Ancel stated that the game was still in pre-production and that they would not start actual development until they had decided on all the tools and processes needed to realize their vision of the game.
On May 8, 2009, a video was released onto the Internet showing a character resembling Jade running through a city, dodging its police force. On July 22, 2009, Laurent Detoc, CEO of Ubisoft North America, confirmed that the video had been leaked but said that this was not done intentionally. He continued to state that they had started working on Beyond Good & Evil 2 because they didn't want to abandon the IP as it has a cachet and authenticity about it, but also emphasized that although they are definitely working on the game it doesn't necessarily mean it's ever going to be released; that's something the future will decide.
During the Gamescom convention in August 2009, Ubisoft representatives stated that the game's development was officially on-hold. However, shortly after the convention Ubisoft stated in an interview that work on the title had been neither abandoned nor put on hold. When fans asked for clarifications regarding the mixed signals coming from Ubisoft, a UK forum manager stated that it wasn't technically possible for the game to be delayed since it had not actually been officially announced. In November 2009, Geoffroy Sardin, the General Director of Ubisoft France, said that the rumours about the game being put on hold were false and that development was still on-going. This was confirmed again in January 2010 by Ubisoft representatives talking to IGN.
On May 28, 2010 (exactly two years after the initial announcement) the French website Wootgaming claimed to have insider information of Michel Ancel leaving Ubisoft Montpellier due to internal problems with the development of BG&E2, and consequently putting the game's development on hold. The rumours were later denied, however, by Ubisoft PR representatives, as well as sources within the studio, and reassured that BG&E2 is still under development.
On June 25, 2010, Michel Ancel appeared at the Montpellier in Game conference and spoke about BG&E2. He assured that the game in fact still is in development, but is being worked at by a relatively small number of people and thus will take a while to finish. Ancel wants to keep the development team as small as possible to preserve BG&E2's artistic spirit and avoid it becoming just a commercial product. The team has been working on tools that will enable developers to create 3D-games in a similar way as the tools being used for the 2D-game Rayman: Origins, which is worked on by only five people.
It is currently unknown if the cast of the original Beyond Good & Evil is coming back to work on Beyond Good & Evil 2. However, it is confirmed that composer Christophe Héral, who scored the music for the original game, will be returning . In an interview with Jeux Vidéo Magazine, Ancel stated that a small team had already been working on the pre-production for a year.
In an interview with Next-Gen, Ubisoft CEO Yves Guillemot stated that Beyond Good & Evil 2 will be made more accessible to the new generation of gamers, in an effort to make sure the sequel does not suffer the same commercial failure the original did. Guillemot clarified that statement later on, saying that they do not intend to make the game more casual game orientated.