"There won't be an Episode 3," confirmed Mike Krahulik, artist and co-creator of the wildly popular webcomic. "We're actually not making a third episode of the game."
According to the duo, the episodic model that has utilized hasn't been incredibly lucrative for developer/publisher Hothead Games, with Episode Two selling as little as one third of the copies that Episode One sold.
Penny Arcade's resident writer Jerry Holkins also cited the development of a newer Hothead IP, , as one of the reasons behind the game's cancellation. "Hothead has DeathSpank, and they have a chance to do something really cool with it," Holkins told Joystiq. "I think they could have made (both) DeathSpank and Episode Three, but I think Episode Three would've suffered. I mean, I know it would have suffered."
While it's certainly a bummer for such a fun and funny series to meet such an abrupt end, Holkins shared plans of continuing the story established in Penny Arcade Adventures in book-form, complete with a possible retelling of the series' first two adventures.
The first two episodes of are still available for sale over at , and a free demo is available for download at the official .