So, hopefully you've already read my idea for an Arkham City sequel. If you haven't, you should go there now. In this blog post, I will attempt to sufficiently sum up each of the villain's stories in this game.
Scarecrow: Let me get this out first: In this story, Scarecrow was mutilated by Killer Croc during the events Arkham Asylum but lived. He was repaired entirely by master surgeon Thomas Elliot, AKA Hush. He has now set out to get revenge on Batman by destroying the city he protects: Gotham. He has developed an enhanced version of his Fear Gas, a kind that spreads quicker, and gives him complete control over those who inhale it. Scarecrow's whereabouts were unknown before he lead an all-out assault on Arkham Asylum. He gained control of its high-tech security, and is safe deep in the Asylum. Despite being out of reach, he is still in control of his army, a mob of crazed criminals that he has hypnotized. He has teamed up with Hush, using him to lure Batman out of hiding. Hush thinks he will get a share of the city when they have defeated Batman. Crane, however, has different plans. He is aware of Batman's true identity due to the resurrection of Ra's al Ghul, who has revealed it to him to gain his trust.
Hush: Elliot found Scarecrow's mutilated body near Gotham Bay, and took him to his office. After being patched up, Crane reveals his master plan of revenge to Elliot, who immediately agrees on one condition: he gets to kill Batman. Scarecrow agrees, with no plans to honor their agreement. Hush then gives himself up to Mayor Quincy Sharp, who throws him in Arkham City. With help from Scarecrow's Fear Gas, Hush captures his victims and kills them by taking off their faces, all for a secret plan of his own revenge on Bruce Wayne. This was unknown to Scarecrow at the time. During the events of Protocol Ten, Hush managed to escape with the help of many of Scarecrow's henchman. All of the henchman were killed. The morning after the events of Protocol Ten, Scarecrow is approached by Ra's al Ghul, who was resurrected using the Lazarus Pit. He reveals Crane Batman's identity, who then reveals this to Hush. Now Hush knows that if he kills Batman, he kills Bruce Wayne.
Ra's al Ghul: Ra's body was taken to the Lazarus Pit by an unknown man, and immediately approached Scarecrow with Batman's identity. He uses Scarecrow's plan as a way of destroying Gotham because he believes it is beyond saving. He has no interest in revenge on Bruce Wayne; he knows that the greatest revenge would be destroying Gotham.
More coming soon!