VideoGamer's source claims EA executives informed Visceral Montreal last month of the cancelation along with details of the company's restructuring plans. Two weeks ago, EA did announce layoffs at its studios in Los Angeles and Montreal. The source also claims Dead Space 3 "was almost canceled" mid-development, and that EA told Visceral to bring in a wider audience than previous series entries did by focusing more on action than horror.
EA believed Dead Space 3 could comfortably outsell its predecessors, with company CEO John Riccitiello saying he could see the game selling 5 million units. EA announced Dead Space 3 pre-orders were "outpacing" those for Dead Space 2 in January's earnings call, although the publisher didn't disclose by what margin.
We've reached out to EA for comment.
Update: "While we have not announced sales for Dead Space 3, we are proud of the game and the franchise remains an important IP to EA," an Electronic Arts spokesperson informed Joystiq.
Update 2: EA responded to IGN, stating the claims here are "flat-out not true" and that it's business as usual at Visceral Montreal right now.
Update 3: To further clarify, EA sent us an additional statement. "These rumours are patently false. While we have not released sales data for Dead Space 3, we are proud of the game and it continues to be an important IP to EA. Appreciate your help bringing down this baseless rumour."