Not much has been said about Prey 2 since its debut at E3 2011 but according to Kotaku, development for the sequel will receive a complete overhaul by Dishonored developer Arkane Austin and possibly see a 2016 release date.
Originally, Prey 2 was to be developed by Prey developer Human Head Studios with the franchise rights being acquired by Bethesda through ZeniMax Media from 2K games in 2009. According to the article, before moving to Arkane Austin, South Park: The Stick of Truth developer Obsidian were working on Prey 2 for about a few months. Fan-site Alien Noire says in shopping the series around to different studios, Rebllion Studios turned it down because Bethesda offered "obscenely low funds."
The lack of details on Prey 2 led many to believe rumors that the game was either delayed indefinitely or cancelled.
Many were surprised with Prey 2's new look and feel at its debut. Prey focused on Cherokee Domasi "Tommy" Tawodi and his abduction aboard an alien spaceship called The Sphere. Prey 2 however, was an open world title taking place on alien planet Exodus and had players step in the shoes of bounty hunter Killian Samuels.
Kotaku was told by an insider that Bethesda tried for months to persuade Arkane to work on the game though employees were upset with the decision. Executives at Arkane allegedly told the studio to forget about it being called Prey 2 and treat it like System Shock.
Human Head had been recently told that the game had been cancelled and spent over a year with no clue what was going on while helping on some aspects of games like BioShock Infinite.
The original Prey had a long development cycle reaching back all the way to 1995 before finally being released summer of 2006 on PC and Xbox360.