Cristophe Gans has told French Magazine DVDrama that work on a second Silent Hill film is well under way, and he promises that it will remedy all of the problems of the first picture.
That said, while he's keen to revisit his role as director of the film, alongside writer Roger Avary, he can't make any promises due to his current involvement in another big-screen videogame adaptation - Onimusha.
"There will indeed be a Silent Hill 2 and it is officially ordered and is already well under way. Once he has finished his adaptation of Driver, Roger Avary will be [working on the script], helped by his friend Neil Gaiman."
British author Gaiman's actual contribution to the project is still rather doubtful, stating on his blog that fans' emails asking about his involvement were the first he'd heard of it.
News source: Eurogamer