They did start a sequel, which was polygon-based and for (afair) playstation 2 only. They went bankrupt or were shut down by the publisher before the sequel was done.

thank god, because I'd kill both the developers and the publisher if it was really a ps2 exclusive

it wasnt.
PC and PS2 Exclusive.
Later PC only.
But it got cancelled.
It looked frikin AMAZING though!
And if someone witht he license starts a new development team for Outcast 2, it would be the most amazing game ever to surface this planet. The most epic of them all!

This is one game that doen't need a sequel. I wouldn't mind a spiritual sequel, but I fear that any attempt to do Outcast again in modern times would fall flat on it's face. (Save a rerelease of course, thanks GOG!)

Here are a few shots from outcast 2 I found online within about 30 seconds.
http://image.com.com/gamespot/images/2001/vgnews/101101/outcast/outcast_screen009.jpg
http://image.com.com/gamespot/images/2001/vgnews/092701/outcast2/outcast_screen009.jpg
http://wallpaper-s.org/18__Outcast_2%2C_The_Lost_Paradise.htm
http://image.com.com/gamespot/images/2001/vgnews/101101/outcast/outcast_screen005.jpg
Even back then it l;ooked ahead of the curve.

Wasn't the sequel supposed to have a storyline set in an alternate universe in which the exact events of the first game never took place?
It could be that my memory is mush, though.

I inform you, if really you have interest to know...
I show you my galleries of 'OUTCAST 2: The Lost Paradise'... from OUTCAST-Spain.
NOTE: 'VER galer�a a gran resoluci�n' = 'TO SEE gallery to big resolution' ;)
- Unpublished images of the cancelled sequel (offered thanks to ' Michael Defroyennes ' artistic chief of the game)
- Gallery of the team of OUTCAST 2: TLP (offered thanks to 'Messiah' of Planet-Adelpha)
- Gallery of sceneries' artworks of OUTCAST 2: TLP (offered thanks to 'Messiah' of Planet-Adelpha)
- Gallery of personages' artworks of OUTCAST 2: TLP (offered thanks to 'Messiah' of Planet-Adelpha)
- Gallery of screens in-game of OUTCAST 2: TLP (offered thanks to 'Messiah' of 'Planet-Adelpha')
- Articles of press in Europe, on the cancellation of the sequel (offered thanks to 'Outcastii.net')
I extract a super summary of one of the last articles that they did:
OUTCAST had cost 1,5 million euros. In OUTCAST 2, we are already with 3,5 million euros but the entire budget will be 5 million euros. It is almost 5 times more his volume of sales.
Do you want to know anything more? :D
Greetings all 'talans' from 'OUTCAST-Spain'!

There was also Totems, the team's next project afterwards. That never saw the light of day, either.

Truly...
I think that you should SEE a section that I prepared only for the ' Creators of Outcast ' (and others). You will like it.
Greetings from OUTCAST-Spain! ;)

It was going to come to the PC as well, and by all accounts it looked like it would have been amazing. The fact they canceled it, still to this day pisses me off.
Long live the Ulukai!

Me and a couple of guys/girls are working on bringing Adelpha back to life using CryEngine 2. The result is a mod that you can apply to Crysis Wars (there's a free trail version available).
You can visit us at http://www.openoutcast.org

how much outcast is been done on crysis engine?

Outcast was not a commercial success, especially in the US where it was expected.
Infogrames did a terrible job at marketing this title in North America.
I remember buying this when it was initially released and none of my gaming friends had even heard of it.
Very sad.