While Gotham Knights is set in a completely separate continuity from the Batman: Arkham series, the game's story really could've worked as a sequel to Arkham Knight. The multiplayer superhero game lets players become Nightwing, Robin, Batgirl and Red Hood and fight to defend Gotham's streets following Batman's death. This premise is similar to the end of Batman: Arkham Knight, which also centered around the apparent death of Batman, but Gotham Knights is set in its own original universe. Despite this fresh start, Gotham Knights doesn't make any decisions that justify its separation from the Batman: Arkham universe.
While it's meant to be disconnected from the Batman: Arkham universe, the story of Gotham Knights could easily pick up right where Batman: Arkham Knight left off. That game saw Batman apparently die, or at least fake his death, with DLC campaigns showing his closest allies struggling to move on from the loss. Robin, Nightwing and the former Batgirl are all present in the Arkham universe, with Arkham Knight introducing Red Hood through its surprise villain twist. This means that the core story of the four young heroes defending Gotham after Batman's demise would still work as a follow-up to Batman: Arkham Knight.
Gotham Knights Can't Escape Batman: Arkham's Shadow
Setting Gotham Knights in its own continuity was presumably to allow for big changes that wouldn't fit with the Batman: Arkham universe, but the game fails to actually make any. Having Joker appear in Gotham Knights to mourn the death of his greatest foe was one unique opportunity, since the Batman: Arkham version of the Clown Prince of Crime died back in Arkham City, but he never actually appears. The actual death of Batman could've been a key difference between the universes too, since Arkham Knight implies that the Dark Knight is secretly still alive. Gotham Knights instead sees Batman briefly return from the grave only to permanently die shortly afterwards, which would have fit naturally after Arkham Knight and could've been genuinely shocking once the Caped Crusader did actually die for real.
There are other key similarities between Gotham Knights and the Batman: Arkham story that would let the new game easily fit into the old franchise with just minor adjustments. The monstrous villain known as Man-Bat plays a key role in Gotham Knights, with the player investigating Kirk Langstrom's death and facing other people transformed by his experiments. Man-Bat also appears in Arkham Knight in a side mission, and his escape from GCPD containment when fans play on Halloween could easily set up his role in Gotham Knights. Talia al Ghul also leads the League of Assassins in Gotham Knights following the death of her supervillain father Ra's al Ghul, which is a possible outcome of his side mission in Arkham Knight. While it had the opportunity to do something completely different, the story of Gotham Knights never actually goes anywhere that a Batman: Arkham Knight sequel couldn't.
The game's general premise makes it sound like Gotham Knights is a Batman: Arkham sequel, and many other large and small details make the two universe much too close for comfort. The reappearance and final death of Batman, the absence of Joker, the presence of Man-Bat and Ra's al Ghul's death all would have made sense as a sequel to Arkham Knight and its cryptic ending. Gotham Knights choosing to establish its own continuity is brave, but the game never actually makes meaningful changes from the Batman: Arkham narrative.