Ten years in development is actually a misnomer. The game was only in development for a few years. The latest game was just the latest revision of concept. Further more despite critical reviews the game was a commercial success. Selling almost half a million copies is incentive on the 360, and the game probably generated a decent profit margin. Finally the game has a cult following. In other words its not universally reviled there is a small legion of players who absolutely love and enjoy the game despite its flaws.
I would say yes Microsoft is going to continue the trilogy, a failure with reviewers does not necessarily mean the concept is a poor one. The majority of reviewers pegged the game down for having significant flaws. However most were also quick to say that the games concept had serious potential. Microsoft is not oblivious to this a fresh property with some design flaws. Leaves a lot of leeway for refinement. It isn't as if the game was bad throughout just that the implementation was lacking.
With better controls, a better camera, more environmental freedom, and a better interface this could be a high caliber series. All it needs is for the developer to sort out what failed, and maintain what gamers enjoyed.
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