So that's it?

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They used the fact that it "flopped" as a cover due to the fact there were so many complaints from religios people about the whole series of The Golden Compass being a film. At some point it is revealed in the books that God is dead or defeated in some way which would then happen in the sequel. They had the intention of making it a trilogy but felt it hard to diverge from what happens in the books to not offend anyone. Then as it did not do too well in the profitable side of things they figured it was just too much to handle and blamed the sales entirely.

That's it because the film studio decided to leave the last three chapters for the second film during post production - then by not having a real climax they had to switch around the two big set pieces to have one. The film bombed as a result and the second was never greenlit. So blame them not Weitz who had his hands tied and had already cut the movie with the original ending (although the effects weren't finished, some of it is in the trailer)