Bethesda Softworks released a statement announcing that the development cycle for Prey 2 has been extended and the game will no longer be released in 2012.
The announcement comes weeks after widely publicized rumors that the project was being written off and would likely be cancelled. The statement made it very clear that Prey 2 has not been cancelled.
As for the reasoning behind the delay, Bethesda says that the game's development has not progressed 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," they said.
Prey 2, an unanticipated sequel to the early Xbox 360 FPS, was well-received at E3 2011. At the time, the game was lauded for it's new open-world approach and dark sci-fi setting. Little had been heard it for almost a year, until the aforementioned rumors of the game's cancellation.
I guess we'll be putting Prey 2 on the back burner for awhile.