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Ubisoft will literally give any game a sequel for some reason, no matter how much it crashed and burned or how tiny the playerbase ended up being.
For Honor has done quite well financially, and that shows considering that they let it keep going with content support as long as it has been meanwhile Far Cry 5, one of their biggest grossing launches in their history as a company, had support dropped for it about a year in.
For whatever reason Ubisoft doesn't want to give them a bigger budget, but it's clear that they're making plenty of money off of the game, they probably want to maintain a massive net positive growth in the revenue and don't want to risk anything after Marching Fire didn't do as well as they were assuming it would and all the resources that were invested in that.
What they would likely be willing to do is pop out a sequel to the game close to its end of life, that way they can sort of min/max their profit on the remaining years of support the game has left because obviously some players will remain diehards vehemently playing this game until it dies and probably even after it dies and some will simply play both games so there's potential money left in this game meanwhile the second game can rake in the big money from new $60 sales.