Bethesda has commented on reports of Prey 2's cancellation, saying the game isn't dead yet, but won't be coming anytime soon.
"Development of Prey 2 has not been cancelled but the game will not be released in 2012 as planned," the publisher told GameSpot. "The delay is due to the fact that game development has not progressed satisfactorily this past year, and the game does not currently meet our quality standards. Prey 2 has shown great promise and we regret disappointing our fans. We have made a substantial investment in game development to deliver the experience fans want. We are determined only to release the AAA game that fans rightfully expect, and are unwilling to compromise our quality standards to meet a release schedule."
Bethesda Softworks first announced that it had enlisted developer Human Head to create the first-person shooter sequel last year, building around a new alien abductee protagonist and a variety of gameplay adjustments. The developers had planned to ditch multiplayer in favor of a focused single-player campaign, and eschewed the discrete levels of the original in favor of an open-world format. Additionally, players could take a variety of approaches to solve their problems, from using brute force to more diplomatic means.