The claim regarding Bully 2’s alleged cancellation comes from AccNGT, a known industry insider usually posting on Twitter. Just recently this account shared information about the issues plaguing the development of Grand Theft Auto 6.
Various vague reports over the years consistently indicated that Rockstar Games did indeed plan and even begin development of a sequel to Bully, and it was generally accepted to be a question of “when” rather than “if” the series would continue. Leaker Tom Henderson stated that Bully 2 might be showed off for the first time at TGA 2021, but this didn’t happen - now, AccNGT claims that the game was cancelled, and not even recently; apparently Rockstar tossed the project in 2017. If true, this is definitely grim news for Bully fans. After this much time, an attempted but cancelled sequel project may well be the last nail in the coffin of the IP which never got more than one mainline title - though luckily Bully has been ported to new platforms since, and thus isn’t stuck in a bygone era of gaming.
— AccNGT (@AccNgt) December 10, 2021 However, several rumors and leaks about a Bully continuation being in development made the rounds online since 2017, which gives many fans hope - it is not unheard of in the gaming industry that cancelled projects are later revived, or that what is broadly reported as a cancellation is just the studio hitting resent because things weren’t shaping up just right. If we collate different, contradictory reports that nonetheless all come from reputable sources, the complete picture looks something like this: in some shape or form, a sequel to Bully has been in development for years and years at Rockstar. In 2017, the project in its then-current form was cancelled or taken back to square one in a move that could be misconstrued as a cancellation, and a different direction was taken - which on paper still means that Bully 2 is in development. It’s just a different incarnation of Bully 2. Of course, reports from insiders and leakers could also simply be… wrong. It happens, and these reports should be taken with a grain of salt anyway - anything that isn’t official news should be. Taking that into account though, we wouldn’t write Bully 2 off just yet.