Some Arkane devs don't want it, apparently. Other tipsters alleged that Obsidian was working on it at one stage, and Rebellion turned it down. Prey 2 is one orphaned game project at this stage.
For a long time the sci-fi sequel was thought to either been scrapped or just being put on hold. So little has been heard about it for such a long period.
Human Head wasn't told the fate of the game until recently, according to, and had in fact been helping out other studios with projects like BioShock Infinite. For a few months Prey 2 had been at Obsidian, but Bethesda has been trying to convince Arkane to take it on.
Getting constantly rebuffed by the Dishonored creator, Bethesda finally told them to take the franchise on whilst scrapping all of Human Head's work, reports Kotaku. Arkane operates two studios, one in Austin and the other in Lyon, with Austin now said to be putting together this rebooted Prey 2.
Grumblings occurred, but high placed developers apparently told the staff to 'treat it as a new System Shock'. Arkane Lyon is said to be developing some other project and it's where Dishonored's Harvey Smith and Raphael Colantonio moved to. Arkane's alleged bash at Prey 2 wouldn't be ready for quite a few years as it would be in pre-production.
Prey 2 was about a human bounty hunter working on an alien world - what will Arkane do with it if this is all true?