According to a Kotaku report, the sequel was cancelled due to a disagreement between Crytek and Microsoft about ownership rights.
Also being reported is that Crytek has canned another original IP that was about to enter pre-production. These issues have apparently resulted in cash flow issues at Crytek.
Crytek says this is all just rumours and speculation, while Microsoft says it has “nothing to announce about the future of the [Ryse] franchise at this time.”
Our speculation on the matter – tick Ryse 2 off your wish-list.