Reached for comment this morning, publisher Bethesda's Pete Hines said the company doesn't comment on rumor and speculation, adding, "I don't have a status update on Prey 2."
Alien Noire first reported earlier this week that development on the game was being shopped around to different studios before landing at Arkane's Austin studio, where they were asked to develop the game from scratch using the same engine that powered Dishonored.
This morning, Kotaku reiterated the report with their own source who is "connected to the project," with some more details.
"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," according to the post. "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."
We've reached out to both Human Head and Arkane for comment and will update this story when officials respond.