Bethesda sent over the following update on Prey 2.
Development of Prey 2 has not been cancelled but the game will not be released in 2012 as planned. 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.
That pretty much confirms what we thought was happening with the game. We hadn’t heard any updates in a very long time, and in the gaming industry that means either the game is canceled or there are troubles. Thankfully it’s not the former. We’ll have more information once we hear something from Bethesda.