Why no sequel?

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Interplay torpedoed Freespace 2 by not advertising it. They chose instead to support a vastly inferior Star Trek game, resulting in abysmal sales and no sequel. The limited edition released in 2005 was an attempt by Interplay to stave off bankruptcy by cashing in on the >$100 eBay prices for used copies of FS2.

Several post-FS2 main campaign mods are developed and hosted at Hard Light Productions (http://www.hard-light.net), as well as fs2_open, the Freespace 2 Source Code Project, which keeps the FS2 engine updated for modern PCs and maintains ports for non-Windows OSes. Since the chances of a FS3 by Volition are generally regarded as next to zero, the closest thing we'll ever get is likely the Inferno total-conversion mod, available at HLP.

Space sims in general were dying a death at the time - Star Wars: X-wing Alliance came out the same year and was the last of its franchise, Descent 3 was also released in 1999 (and tanked), the Wing Commander series had been put to bed a couple of years earlier, etc. Tachyon: The Fringe went nowhere. They were the pinnacle of PC gaming one moment, with multi-million dollar budgets at a time when that was impressive, dead the next.

Went the same way as graphic adventures, flight sims. In each case the genre reached a peak, and then what? More escort missions; more missions where you have to protect cargo containers; more missions where you have to run away from an exploding sun. More cutscenes. Some trading.

Freespace 2 was the best of them. Wiped the floor with Wing Commander. That's why it was Game of the Year. I remember playing it late into the night. "Dive!", the giant ships, the unresolved ending. I felt that the trappings were superb but the underlying gameplay was limited. There's only so much you can do, stuck in a spaceship cockpit.

And with Half-Life you don't have to remember the key combinations to manage your shield / weapon balance, launch decoys etc. Flight sims had the same problem; there's still a core of people who are prepared to put in that kind of effort, but not enough people to fund a multi-million dollar production with live action cutscenes etc. The Eve: Online model is pretty much optimal, but the inertia is such that there's only room for one elephant in the... closet. I've mixed my metaphors there.