Rumors have been swirling the internet of a Silent Hill reboot. But given that there are also rumors of a Silent Hill episodic game in the works, as well as a separate Silent Hill game which will bring Hideo Kojima back on board, a full reboot seems unnecessary and unlikely for a few reasons.
Normally, full reboots replace what has been established as canon, and make significant changes to a franchise's story, giving the universe a new start. But given Silent Hill's deep lore, which is already well established and perhaps the franchise's strongest attribute, given that the last couple games themselves were not regarded positively strong, a full reboot would be more risky than rewarding.
A "soft reboot" would seem to be a safer route to take, or even a remake of the first game. One example to take note of is Doom's "soft reboot" in 2016, which still maintained the Doom universe's lore and kept the chronology in effect. Doom's 2016 reboot successfully marketed itself as the first game in new lineage of Doom games, while still keeping the timeline intact of the old games and finding a way to connect them into the chronology.
In a way, Silent Hill: Shattered Memories for the original Wii was a remake, or more specifically, a re-imagining, of the first game. It retained the main protagonist, Harry Mason, in his mission to look for his missing daughter in the town of Silent Hill. However, the overall plot, characters and universe was changed in many ways, and is considered a stand-alone title which exists outside the domain of the Silent Hill's canon. That has not stopped some fans from attempting to find ways to
With multiple projects potentially on the horizon, a re-imagining of one of the Silent Hill games, or an entirely new game that re-imagine's the town, is one possibility. However, without the cult and the key aspect's of the fictional religion that haunts the town, it is hard to maintain some semblance of what Silent Hill is and is not without delving into the fundamentals of the established lore to a degree. Then again, considering that the original source of the town's haunting remains a mystery, that also may leave the game's premise open to different universes and lineages of what is canon.
As it stands, no one exactly sure where the original curse in Silent Hill originates from, as the Native Americans who lived there previously were also haunted by this areas' strange powers, from which they derived their own religious beliefs which revolved around it. When European settlers moved in to the area and established the town of Silent Hill, they too created a religion and cult of which its symbolic beliefs and theology were molded around these haunting occurrences and powerful forces.
These beliefs gave way to The Order, which some fans believe is a "re-skinned" version of the beliefs and religion that the Native Americans in the area believed in, based on the haunting powers present there. Given that The Order was established by European settlers who were Christian, the religion they fostered in Silent Hill was, to a degree, understood through the lens of broad themes influenced by Christian philosophy.
One could potentially surmise that other religions, cults, and beliefs would come to fruition within and around the hauntings of this town's powers during different periods, and may have different avenues in which to establish their own chronology of lore, if viewed through the lens of their own originating world-views. This provides ample room for a "soft reboot" of Silent Hill to maintain the chronological existence of its previous games.
In keeping with likely scenarios, and another possibility, given the universe of Silent Hill's already-established lore which provides much to work with, it would make strong sense to create storylines that revolve around the plots of particular characters and the story of their experiences once inside the town, without necessarily focusing on the town's history and lore itself.
For example, Silent Hill 2 never really delved deeply into the lore of the town's cultists and its past history in the same way many other games did in addressing what the cultists had established and fostered in Silent Hill. Silent Hill 2 focused on the ways in which the protagonist was influenced and the tribulations he endured through the ways in which the town's original hauntings transpired to to take effect on him, some of which was the doings of the cultists and The Order.
Therefore, the universe of Silent Hill offers ample room to create stand-alone stories, re-imaginings, and even remakes without necessarily tampering with the original canon, which is beloved by Silent Hill's avid fans. Even games such as Silent Hill: Downpour, and Silent Hill: Homecoming, which were not particularly received in strong light, had arguably strong storytelling and fit in well to the series' chronology.
Given the success of Resident Evil 2's remake, and the potential excitement for the upcoming Resident Evil 3 remake, remaking any one of Silent Hill's more positively received games would likely be welcome by new and old players alike. But completely rebooting the series would seem risky in establishing fundamental changes to the lore and root of the town's history and story.
More likely, a "soft reboot" for Silent Hill, similar to Doom in 2016, would appear to be a safe course of action to start the series anew, while not throwing out the events and chronology of the past games, and still establishing the potential to carve out a new mythos or chronology with its own set of plotlines and history to work with. For example, perhaps a completely different paradigm could co-exist outside the one that revolves around Silent Hill's cultists and their diabolic belief-system. After all, in many ways, the cultists were exactly that: a cult. They largely remained on the fringes of Silent Hill's society for much of the town's past history.
If Silent Hill rumors prove to be true in confirming a "soft reboot", it could allow the Silent Hill series to take shape in the chronologies of any time period, including the past, future or co-existing. Perhaps, there may even be a time and place for Silent Hill's established cultists to be wiped out completely, and new story-framework to be established that revolves around the dwelling of the town's haunts and its unexplained energy source.