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The Official Nintendo Magazine in the UK has a teaser poster at the end of their most recent issue.  The teaser is very interesting and seems to refer to a Red Steel sequel.  Here’s what is quoted in the teaser poster:

Your Move, Young Grasshoppa…

Bigger.  Better.  Bolder.  Bloodier.  And oh—it’s online.  First screens and hands-on impressions.  Only in next month’s Official Nintendo Magazine.

I honestly think that if they sharpen up the controls and include a deep multiplayer/online mode, that it would be a great game for the Wii.  I just hope they take their time to make it a great follow-up to the first game.

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