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."
EA is effectively bringing an end to the Dead Space series after canning Dead Space 4 in pre-production, VideoGamer reports. According to the site, who spoke to an anonymous source familiar with the unannounced project, the publisher terminated the development of Dead Space 4 in light of Dead Space 3 failing to achieve its sales targets.
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.
Source: Report: Dead Space 4 canceled after Dead Space 3 sells below targets | Joystiq