Strategy First and Game Factory Interactive announced in June 2004 that Russian developer MiST Land South would develop the next two games in the Jagged Alliance series: Jagged Alliance 3D (JA3D) and Jagged Alliance 3 (JA3).
Jagged Alliance 3D was envisioned as "JA2 in 3D", or basically the same game as Jagged Alliance 2 but using a 3D engine. Jagged Alliance 3 would be the "true sequel" to JA2, a full-fledged game in the same spirit as JA2, and using the engine developed for JA3D. JA3D would come out quickly, within a year or two of the release of the generally successful Wildfire mod, and be followed by Jagged Alliance 3. SFI choose GFI because GFI had already released Cops 2170, a tactical-strategy game published by SFI in North America. The two companies already had a relationship, and it was felt the JA3D project could be mutually beneficial.
From statements made by both Strategy First and Game Factory Interactive, it is apparent that GFI assumed the costs for the development, with SFI providing the intellectual property and the overall vision for the project. This arrangement proved to be very cumbersome, and prone to misunderstandings and confusion. SFI, naturally enough, had very ambitious goals for JA3D while GFI sought to control development costs and time.[30]
The initial plan was for GFI to use a modified Cops 2170 engine to quickly produce JA3D. However, GFI already had a second strategy game in production, ALFA: Anti-terror, and they made the decision to use this engine for both games. GFI planned to set the game in Africa, which was fine with SFI. However, GFI ran into trouble with the strategic layer for Jagged Alliance. They proposed a mission-based structure for JA3D instead. There would be no free-flowing strategic layer, as in Jagged Alliance and Jagged Alliance 2 where the player made strategic movement decisions, and initiated attacks on a map. Instead, the game would be structured like Jagged Alliance: Deadly Games, with a series of missions, which were essentially combat-only levels. SFI was resistant to the idea, but agreed to it, feeling this would shorten the development time. Besides, JA3D was always intended as a bridge between JA2 and JA3, so it was acceptable that it was not a "full game".
In 2004, initial screenshots of the new engine were released, showing a somewhat primitive 3D engine with familiar Jagged Alliance characters, such as Shadow.
In May 2005, the MiST Land South developers announced they would be discarding the turn-based combat system in favor of real-time combat. The turn-based combat had been a hallmark of Jagged Alliance from the very beginning, and it was a major reason why most fans stayed with the game. This announcement was a surprise to Strategy First, and was very quickly vetoed by Richard Therrien, VP product development of SFI.
In September 2005, SFI withdrew the rights for Jagged Alliance 3 from GFI, leaving them with the JA3D license only.[31]
A pre-beta version of JA3D was shown at the 2006 E3 convention, and received a generally favorable reception.[32] The gameplay appeared to be very similar to Jagged Alliance 2, with updated and improved graphics, as well as a 3D combat engine.
On July 20, 2006, Game Factory Interactive announced that MiST Land South was being dissolved, as of August 1, 2006.[33]
In August 2006, SFI withdrew the rights to JA3D as well. GFI claims that the game simply did not fit within SFI's plans. SFI, on the other hand, states that JA3D was in an incomplete state and not ready for the scheduled release date. It was obvious that SFI, having faced years of development without any progress, had finally given up on the project.
This left GFI with no rights to use any of the intellectual property of JA3D, including characters and story line. GFI now plans to rework the characters and story to remove Jagged Alliance-specific details, and will publish the game under a different name. In a September 3, 2006 post on its discussion boards, GFI claims that SFI owes it money, but this is denied by SFI without further elaboration. One of the changes GFI plans to make to JA3D is the introduction of a strategic layer.
In November 2007 Game Factory Interactive released Hired Guns: The Jagged Edge.[34] The game does not have any storyline or characters in common with JA2, as GFI lost the rights to use any of the intellectual property of Strategy First. Still, it is seen as a spiritual successor; the game is structurally similar to Jagged Alliance series and features a mercenary-themed plot, turn-based gameplay, and a familiar game interface.
Strategy First intended to produce Jagged Alliance 3 internally, with head developer Thiessen promising a much more open experience than any other Jagged Alliance game. There were expected to be five separate factions to fight in JA3, instead of a single enemy. Characters were said to have their own agendas and allegiances in addition to randomization of various settings of the game upon startup in order to make it less predictable; a character who was allied with the player in one game could be their enemy in the next. Player actions were also said to influence how the characters of the world react to them.
In December 2006, Strategy First outsourced Jagged Alliance 3 again. The publisher, along with Russian developers Akella and F3games, were to create the game, setting an approximate release date of late 2008.
As of October 2008 the game has been delayed again, and Akella's website was displaying a release date of Q1 2010. This delay was likely due to publishers demand to improve graphics.[35]
On December 21, 2009, a German language game site reported that Akella had stopped development on Jagged Alliance 3.[36] Strategy First had made no statement on the future of the Jagged Alliance series.
On March 9, 2010, German outfit bitComposer Games (now bitComposer Interactive) picked up the rights to the PC strategy series, and started "preliminary development" on the third full game for release in 2011.[37] In August 2015, Nordic Games (now THQ Nordic) acquired the rights from bitComposer. “The decision to acquire Jagged Alliance was an absolute no-brainer for us”, commented Reinhard Pollice, Business & Product Development Director at Nordic Games,[38] although no immediate announcement has been made regarding their specific plans for the series.
On September 17, 2021, during the THQ Nordic 10th Anniversary Digital Showcase Jagged Alliance 3 was announced for PC, now in development by Haemimont Games.[39]