Not sure what the long term plan will be. I will just say I'd be truly surprised if they actually made a full blown sequel. KI has always struck me as the little game that proved it's merit but MS still doesn't see as viable enough to give Gears or Halo level funding to.
I think they'll have a sequel eventually when they've outgrown the engine or they want to do something with the mechanics that don't make sense for the current platform. For example, tag teams was requested by the community and I think it was Isgreen who said that with the current engine it's just not possible. Another fan-requested feature were stages with multiple parts, but again MS/IG said that wasn't in the cards due to how the stages were built (and maybe it would be very expensive to do). I'm sure there are other things they had to rule out due to the engine and current game design.
That said, I think a sequel wouldn't be in the cards until 2019/2020 at the earliest and 6-7 years sounds like a great run for the current game. When they do have a sequel then I suspect they'll approach it as a GaaS again with seasons.