Runic Games found great success with the first two Torchlight games, but have no current plans to make a third game in the series.
Speaking with IGN, company president Marsh Lefler explained that the team simply feels "burned out" on that franchise, and that they aren't interested in attempting a third game.
A lot of this comes down to the release of Diablo 3. When Torchlight came out, it didn't face much competition; now, Lefler argues, there's no competing with Diablo. "Let’s admit it, Diablo 3 is killing it right now", he told IGN. "Diablo 3 is a really fun game. Not that Torchlight 2 isn’t a fun game, it is, but it’s just different. For us to try to compete with Diablo 3? We weren’t trying to compete before."
Runic Games is currently working on Hob, a Zelda-like adventure that was on display at PAX Prime. The first trailer for the game is embedded below.