I wanted to look into the series since my brother was a big fan of the original game, but sadly I found out that it was indeed cancelled. Although EA may bring back many Bullfrog properties, it’s not yet known whether Dungeon Keeper will be one of them or not.
Dungeon Keeper 3 was originally announced back in February of 2000 with concept designs dating as early as 1999, where a trailer for the third game was included in Dungeon Keeper 2.
However Bullfrog pulled the plug on the game before it could even get off the ground (no programmers were ever assigned to the project). That’s because EA decided to put the team on some much higher profile projects, namely The Lord of the Rings and Harry Potter games.
The third game was to build on the previous games in which you defended your evil dungeon from do-gooders that would destroy it. The game was to include a new race and new good heroes, which would be playable.
However there is a “kind of” third game in development right now. And that game is Dungeon Keeper Online. Although so far it is being developed for the Chinese market.