SUDA51 and the team at Grasshopper Manufacture appear to be working on a horror game using Unreal Engine 5. The news was discovered in an official tweet published today (via ResetEra) from Grasshopper Manufacture which contains a brief look at the development studio. The footage shows them working on 3D models and 2D concepts or an horror-themed enemy boss and if you zoom in you can see a file tree indicating there will be weapons, leading to speculation that Grasshopper Manufacture is reviving the cult horror game Shadow of the Damned, or possibly a spiritual successor.
Loved No more heroes 3. This seems an interesting direction. Looking forward to it!