Bethesda released a statement this morning letting everyone know that Prey 2 has not been cancelled, but merely delayed and not releasing this year:
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. Prey 2 has shown great promise and we regret disappointing our fans. 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.
This news comes after many rumors were spread about Bethesda potentially cancelling the game after the studio took down several presentations scheduled to take place at GDC last month. Prey 2 was said to be different from the first game, giving players more open-world accessibility. Stay tuned for more updates!