Bethesda has confirmed in a blog post that Prey 2 is not, in fact, dead - but it is in trouble.
"Development of Prey 2 has not been cancelled but the game will not be released in 2012 as planned" the statement reads. "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."
The post doesn't clarify what went wrong with the game's development, but it doesn't bode well for the game's future - nor for developers Human Head. Nonetheless, Bethesda claim to be taking steps to resolve the issue. "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."
Prey 2 originally won our interest for its mix of Deus Ex-style open ended missions, Mirror's Edge's traversal, and a visual style that blends Blade Runner and Mass Effect. That said, we've seen very little of the game since Graham previewed it almost a year ago. There was always a danger that Prey 2's impressive E3 demo could turn out to be more smoke than fire, and hopefully Bethesda's renewed investment in the game will help the final product live up to its original promise.
There's also a chance that the game was cancelled, and that the subsequent internet grumbling caused the publisher to reassess its position. In which case: good work, internet! The power of your collective dissatisfaction has saved the day once again.