If at first you don’t succeed, mutilate some more goody two-shoes teddy bears. That’s the approach Behaviour Interactive, the studio behind Naughty Bear and its upcoming sequel Naughty Bear: Panic in Paradise seems to be taking. The development team has taken the criticisms facing the inaugural adventure of the unfriendly ursine to heart and have gone back to the drawing board to give it a second go.

If you didn’t play the first game, the story is fairly simple. It’s easy to imagine Naughty Bear is what would have happened if Rudolph the Red-Nosed Reindeer hadn’t benefitted from Santa’s intervention. The cute, cuddly guy is snubbed by the other bears, goes on a killing spree and eventually earns his revenge.

Now, the bears that have survived his rampage have again ignored the anti-hero of the tale, going on vacation without him. Naughty Bear decides to tag along anyway to show them just why that isn’t such a great idea. The premise is great, and there are a number of clever pop culture nods.

Unlike its predecessor, Panic in Paradise will be a downloadable title rather than a retail release. Despite the lower price inherent in that model (and the waning preconception that XBLA and PSN titles offer less content), Project Manager John Sweeney told us that this game is actually bigger than the misanthropic mangler’s first time out. In addition to the 36 cute, cuddly, soon-to-be-deceased bears to stalk and kill, the title features a customization aspect that changes Naughty Bear’s stats and, in some cases, is necessary to gain access to an assassination target. The items level up independently, so the more you focus on a play style, the better off you’ll be.

I had a chance to play a bit of the game and get a feel for how well its shaping up at this stage. Despite his unquenchable, stuffing-filled rage, Naughty Bear relies on stealth. A lot of time will be spent crawling through the underbrush to get the right angle to take out guards innocent vacationers. The pace is a bit slower than I would have expected, and hopefully it will be tuned up before launch. At the same time, they’ll need to ensure they hang on to their (frankly surprising) E-10+ rating issued by the ESRB.

Once you get into combat, there seem to be a few things that need to get ironed out. The hit detection isn’t great, and the combat felt a bit sluggish. The executions and finishing moves were fun to watch, but the variety is going to need to be significant in order to keep players excited throughout the whole adventure. According to Sweeney, the critical path is a brisk four-hour affair, but there is much more to see and do beyond that.

The concepts behind Naughty Bear: Panic in Paradise are sound. Approaching the different victims has a Mega Man feel to it, in that players will need to consider the best approach through the ranks. For instance, killing one bear is significantly easier if you’ve already taken out his brother (and then wear its head as a mask). It’s gruesome, funny and intelligent.

It’s important to recognize that there is still a great deal of time before launch, and hopefully Behaviour will be using that to refine and perfect. There are some fantastic ideas behind Naughty Bear: Panic in Paradise, but hooking people for more than the four hours it takes to walk the critical path is important, especially at the $15/1200msp price point. If the studio can ensure the gameplay lines up with those concepts when the title launches in mid-October, the misanthropic mammal could redeem himself.