Series writer and director Kotaro Uchikoshi kindly took to a newly-made English Twitter account to explain the situation this morning to English-speaking fans. According to Uchikoshi, "'in Japan', 999 and VLR are in the red. They are not selling more than people think." Because of this, funding for a the third game cannot be secured. "I'm so sad, but all the companies exist for profit-making purposes. If the profits can't be expected, naturally, the project isn't approved."
Uchikoshi seems more torn up about this than anyone, saying, "I feel ashamed of my own inadequacies," because noting that Zero Escape 3 could still happen if it finds funding. It just isn't happening right now. "I still haven't given up. For example, if the title which I make next bring about a good result, the wind might shift to another direction. Or, if someone with executive ability (financer, producer, publisher or millionaire!) propose the investment, everything could go well."
Apparently they "examined crowd-funding like Kick Starter," but, "figured the idea is not quite persuasive enough." Maybe you can send Uchikoshi a Facebook message and explain that a Kickstarter might just work.
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destructoid's previous coverage: Zero Escape: Virtue's Last Reward