The latest issue of Xbox World magazine is carrying a rumour that suggests Avalanche Studios is developing Just Cause 3 and it’s heading for a 2012 release.

The rumour section of the magazine has the following blurb. “Our spies say devs Avalanche are hard at work as we speak, and that it’s set for release next year.”

Last year, following Just Cause 2’s success, Avalanche studio head Christofer Sundberg told Develop that the studio was “keen” on creating a sequel for the title.

“We are absolutely interested in working with the Just Cause IP again,” he said, adding that fans “shouldn’t be surprised” to see a follow-up to the second game.

The studio’s latest is military co-op shooter Renegade Ops for PSN, PC and XBLA.

Thanks, CVG.