Microsoft Train Simulator - Microsoft Train Simulator 2

On May 7, 2003, Microsoft announced that it would be making a sister game of MSTS called Microsoft Train Simulator 2 and it was first demoed to the public at E3 on May 15. Seemingly its main improvements were the addition of people to the game (e.g. passengers waiting at the stations, people operating the new locomotive roster, etc.), more realistic crashes and other accidents, and turntables. It was being developed by Kuju Entertainment, the original MSTS creators. Despite restructuring efforts at Kuju, the project was however handed over to Microsoft Game Studios on August 18, 2003.

This project was ultimately halted, as the following statement on April 24, 2004 from Microsoft confirmed:

Microsoft Game Studios has halted the Windows-based game "Train Simulator 2.0." The decision to halt "Train Simulator 2.0" was made some time ago and was based on a long, hard and difficult look at our business objectives and product offerings. We remain focused on the simulations category with successful, platform-driving franchises such as "Microsoft Flight Simulator." —

On January 19, 2007, Microsoft announced the relaunch of the Microsoft Train Simulator project. This time the game was being made in-house by ACES Game Studio (Microsoft Game Studios) known for its long line of Microsoft Flight Simulators, as a part of the "Games for Windows" initiative. The game would have used the Microsoft Flight Simulator X graphics engine and it was planned to be compatible with both Windows Vista and Windows XP. A post on the 'The Little Wheel Goes in Back' blog, written by one of the developers, on August 23, 2007 suggested the working title was 'Train Simulator 2'.

On January 23, 2009, Microsoft announced that it was permanently closing ACES Game Studios, the internal development studio responsible for both Microsoft Flight Simulator and Microsoft Train Simulator. As a result, all future development on Train Simulator 2 (which was entering the final stages of development at the time of the closure) was immediately halted, marking the second time that the project was terminated. While Microsoft states that they are committed to both the Flight Simulator and Train Simulator brands, it is currently unknown if the Train Simulator 2 project will ever be resurrected and completed sometime in the future. Although Aces Studio has closed, they have reopened under the name of Cascade Game Foundry, and they are planning on continuing to develop simulations.