They might have had a 5 year plan, but it's possible that the lower popularity of the game has made them change their mind and cut the series short. It's also possible that Sonic Team is bundling several different stories together into one game engine. So while Ep I - III focus on Ethan, the Illuminus, and the SEED - Episodes IV - VI might take place several years (perhaps several millenia) in the future and revolve around totally new characters and a new storyline.
I doubt there will be a second "War between the races", though they may flirt with the possibility. As I've said all along, the Illuminus are likely just being used to further a darker and more annihilistic goal. I believe that Hauser is following the call of the darkness and the focus will shift quite quickly into Ep III to reflect this, and I believe that Hauser will betray the Illuminus once he no longer needs them. Not unlike how he betrayed the Mother Brain.
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PSO stopped at Episode 4. So it wouldn't be unreasonable to think that it stops here.
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I think there will at least be an Episode IV. Phantasy Star had four games. Phantasy Star Online had four Episodes (even after saying Ep III was the last). I believe that PSU will have an Episode IV, and I also believe that there will be one more addition to the Phantasy Star franchise - another series of four games or episodes to close out the franchise. Perhaps one that draws the entire franchise together - much the same way PSIV drew the entire PS series together.
Phantasy Star seems to have the curse of threes - PSIII was the black-sheep of the original series, PSO Ep III was the black-sheep of the PSO series. PSU, the third installment of the franchise, has meet with a lot of criticisms and seems to be the black-sheep of the franchise. So we'll have to see whether they cut their losses after PSU or if it spurs them to create a fourth installment to the franchise which redeems it.
<font size=-1>[ This Message was edited by: Sinue_v2 on 2007-10-09 17:02 ]</font>