Halloween 2 is the third special episode of the Club Penguin Shutdown series. It was released for Halloween 2018.
Gary and a lab assistant named Jerry were using a machine to find where CPI (possibly Club Penguin Island) was. After learning that Coconut Cove was (supposedly) CPI's location, Gary tried to launch an extraction to teleport a CPI penguin into the lab, but the machine malfunctioned, mutating the penguin inside and turning him into Sludge, the fat orange Mutant Penguin. The Mutant Penguin cried out in pain and fury, angrily demanding the two scientists fix him as he ran all around the lab. In his panic, he accidentally ran into the machine's control panel, reactivating the machine, and then knocked Jerry into the machine's terminal. This caused Jerry to get fused with another penguin inside, turning them both into Double, the two-headed Mutant Penguin. Sludge yelled at Gary to fix him again, and then tripped and slammed into the control panel. This caused the machine to malfunction even more, and Sludge started punching the machine itself, much to Gary's frustration. As it broke down, the machine churned out one last mutant: Shell, the glitched-shelled, hollow, blue Mutant Penguin. Sludge was now furious and grabbed Gary, ignoring his pleas and quite literally squeezing the brains out of him. Double apologized to the other two Mutant Penguins, since all three of them were stuck as mutants forever now.
Later, the server's clock struck 12:00 am on Halloween, causing the island to glitch just like in the first Halloween episode. This caused Shell to start glitching out. He then rushed over to Sludge, giving the latter a headache. He begged Shell to stop, but he wouldn't let up, so Sludge grabbed Shell and ran outside. Double followed after them, and they all retreated into the ski lodge next door, the same lodge Lil Jeffy and his friends entered in The Reward.
The Hybrid Sea Monster appeared at the tail end of the episode. One of its arms broke into Gary's lab and took Gary's corpse and then his brain (which had been squeezed out of his skull by Sludge), presumably to eat it. Moments later, it uttered its first words: "MMMMM, THAT WAS SCRUMPTIOUS..." It's implied that the Monster might have absorbed Gary's intelligence after eating his brain.
- Halloween 2 is the first episode to canonically take place before an episode that preceded it by airing, being The Gathering in this case.
- Although there was no explicit explanation for the teleporting machine malfunctioning, it's confirmed canon to Club Penguin that it always takes Gary 3000 tries to get any of his inventions to work properly Taking this into account, this was likely not the 3000th time the teleporting machine was tested.