Yep, although Crytek were originally planning to develop Farcry 2 as the first game to run on the CryEngine 2 until Ubisoft made them an offer they couldn't refuse. Ubi now own all the rights to the Farcry brand including characters, likenesses, and environmental settings, hence the reason why we now have Crysis to look forward to and not Farcry 2 (although I'm not complaining).
Far Cry 2 would not allow them to do what they've done with Crysis. It's better for everyone all round this way. And I think it's unlikely we'll ever see a Far Cry sequel now. Crysis has taken the exotic island location and seems to have done everything that can possibly be done with it, so I don't see what would be left for a Far Cry sequel to do, unless they moved it to a totally different setting. Otherwise it would just be a re-hash and 'been there, done that'. Far Cry 2 on another planet perhaps...?
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