Sometimes, things don't go as planned. Game development is tricky, and nobody can predict when a studio may go under or a game may sell less than what was expected. Episodic games mimic serial television. Such games are divided into multiple episodes, with each ending with a lead-in to an episode intended to follow. However, sometimes business realities get in the way, and an episodic series is cancelled before it can be finished.
Penny Arcade Adventures: On the Rain-Slick Precipice of Darkness
Penny Arcade Adventures was planned as a four episode series, but was cancelled after two episodes were produced. The publicly stated reason that the series was cancelled, according to Penny Arcade's Jerry Holkins, was that Hothead, the games' developer, was also working on the DeathSpank games at the time, and rather than see either DeathSpank or Penny Arcade Adventures suffer due to a split development effort, it was mutually agreed to cancel production of the third episode of On the Rain-Slick Precipice of Darkness. Holkins has, however, written the remaining story in text form.
The series was eventually revived, and a third game, produced by Breath of Death VII developer Zeboyd Games, has been released. However, Episode 3 is of a dramatically different style compared to the first two episodes.
SiN Episodes was a planned episodic sequel to Ritual Entertainment's SiN. The series was planned to span nine games, but only the first, Emergence, was released. Poor sales of the first game forced Ritual to sell the company to casual developer MumboJumbo, who cancelled all future titles in the series.
The Xenosaga RPG series was originally conceived to span across a total of six episodes, with each game a full-length RPG. However, following internal struggles between the games' developer and publisher, the decision was made to cut the series down to a trilogy. While a third game was produced and released, completing the storyline, the cancellation of several games in the series led to a conclusion much sooner than had originally been anticipated.
Sonic the Hedgehog 4
Sonic the Hedgehog 4: Episode 1 was announced in February 2010 as the first in what was intended to be a new series of downloadable 2D platformers featuring Sega's mascot. The game was released in October 2010 after significant delays caused by massive fan outcry after a near-final build of the game leaked to the internet. The game was a financial success, selling over a million units across all platforms, but poorly received by fans even after it was delayed to adjust some of the criticisms from the leaked build. This forced Sega and Sonic Team to completely rethink Sonic 4: Episode 2, which was finally released on May 15, 2012 with a redone graphics and physics engine. All subsequent episodes have been cancelled as Sega and Sonic Team wait to "see how the users accept this episode," making Sonic 4 one of the few episodic game series whose cancellation was in spite of, rather than because of sales.
Unlike the other examples listed, Rayman Origins, the first 2D Rayman game to be designed by series creator Michel Ancel since the first, never received a single episode. The game was announced at E3 2010 as an episodic prequel series meant to explore how series stalwarts Rayman and Globox became the heroes fans know and love. The game went dark for over a year, missing the planned Holiday 2010 release for the first episode. When the game was rerevealed shortly before E3 2011, the scope had greatly broadened from its original intent. The episodic structure was cancelled in favor of giving the game a full retail release, as it was felt that building the game around being distributed in small, downloadable chunks would be a poor fit for the greater focus the game had taken. Ubisoft released Rayman Origins on November 15, 2011.