The high point of ToEE was the combat system, which was a near-complete conversion of the 3.5e ruleset to computer game format and was very fun to play with. Unfortunately, the game suffered from countless crippling bugs, bad writing, bad voice acting, a boring storyline, badly-needed features that were removed due to time/budget constraints, etc. It wasn't until the Circle of Eight started releasing fan-made patches that the game really became playable.
By that time, however, the damage had already been done and ToEE had already been panned by reviewers and players as buggy and incomplete. I would be really surprised if a ToEE sequel were to ever be made.
WizarDru said:
Atari's atrocious support (and steadfast refusal to pay Troika to work on a patch...for pay, at least) meant that a group of fans calling themselve the Circle of Eight managed to get a bugfix out sooner than the company. Atari clearly wanted the game out, bugs or not, features or not.
The way I heard it, Troika agreed to have ToEE out by a certain time and within a set budget. When the deadline came, Troika basically said "We need more time and money," despite the fact that they'd agreed to have the game finished by then. Atari refused, and as a result ToEE was released in an unfinished state.
This is all second-hand knowledge, though. But based on what I've heard, it looks like Troika is just as much to blame as Atari is.