Main article: On May 7, 2003, Microsoft announced that it would be developing a sequel called Microsoft Train Simulator 2 and it was first demoed to the public at 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,. It was being developed by, 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 () known for its long line of, as a part of the ' initiative. The game would have used the graphics engine and it was planned to be compatible with both. A post on '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'. Congratulations you have successfully installed tomb raider. 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 unknown if the Train Simulator 2 project will ever be resurrected and completed sometime in the future.

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However, considering the fact that they discontinued support for Windows 2000 in 2010, Windows XP in 2014, and Windows Vista in 2017, it seems unlikely. Many former employees of ACES Game Studios went on to join Cascade Game Foundry, a new company that was itself founded by two ACES alumni. Cascade Game Foundry focuses on developing entertainment simulations. Open Rails [ ] Open Rails is an project launched, developed, maintained and nurtured by a team of volunteers and licensed under. Its project summary states the following: Open Rails is a train simulator that supports the world's largest range of digital content.