Prey 2 has been officially cancelled by Bethesda.

Bethesda vice president Pete Hines told CNET at PAX Aus that work on the FPS has completely ceased.

"It was game we believed in, but we never felt that it got to where it needed to be – we never saw a path to success if we finished it," Hines said.

"It wasn't up to our quality standard and we decided to cancel it. It's no longer in development. That wasn't an easy decision, but it's one that won't surprise many folks given that we hadn't been talking about it.

"It's a franchise we still believe we can do something with – we just need to see what that something is."

It was announced in 2011 that Prey 2 was in development at Human Head Studios, but rumours almost immediately surfaced that its development was in trouble.

The game was later rumoured to be in development at Dishonored developer Arkane Studios.