I believe sega still does Xiggz. Last I heard was a long time ago, they were pondering whether or not a sequel would be financially profitable. It's a shame, if that's the case. I wish they'd sell to someone else. Isolation was a truly unique event. It was like Alien 79 for videogames. It was borderline perfection and I personally do not expect that lightening to strike twice. Perhaps if we get an actual Aliens movie from Disney that reignites the public interest in the franchise, Sega may be more motivated to green-light a sequel.
But what would it be about? The events of Hadley's hope before the marines arrived? Maybe you could be one of the inmates on fury 161. Thought dead, but somehow survived or was hiding. Now the place is shut down, and your completely alone, except for an alien. What if the fire didn't kill the queen? The xeno did survive the molten lead afterall. Maybe you'd be stalked by the queen, she'd be growing slightly bigger every level, and she'd be hungry. How in the world would you escape? I don't know about you, but the thought of hiding from an ever growing Alien queen in that place with only a shiv and your intelligence seems horrifying. Or you could be battling insanity as well as the queen. But does she induce it herself or is it just your own mind going insane? Having to decide on the fly if something is real or part of your mind would be wild. Did you really see someone go around that corner? Or is she beckoning you to her?