Missing in Action: The Lost Games of the PC, Part 1
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It's very likely that both sequels were under active development. The most relevant thing here, however, is that Black Isle Studios, as a development entity, is dead. Unless Interplay comes forward with information to the contrary, our best understanding is that Black Isle is being kept as a publishing marque for Interplay's RPG-flavored titles. Given this, even without the licensing tangles, Baldur's Gate 3 and Fallout 3 are dead as they stand.
Our assumption is that Interplay decided that the console-based Dark Alliance games were a better investment than another Baldur's Gate RPG on the PC, which unfortunately left the smaller but hard-core PC RPG audience in the lurch. There are rumors that Interplay is fighting to get the Baldur's Gate PC license back from Atari, but no reason at this point to raise hopes.
It's possible that another developer could take up the reigns on either of these projects, presumably on behalf of Atari, but without lead developer J.E. Sawyer, who is no longer with Black Isle or Interplay, it seems doubtful.
