In 2003, Paul W.S. Anderson, who directed Mortal Kombat (1995) was offered to direct the third film but turned it down to work on AVP: Alien vs. Predator (2004). In 2010, he told G4 in a interview that he expressed interest in returning to the franchise, though he is not currently under consideration to do so.
Mortal Kombat: Rebirth (2010) and Mortal Kombat: Legacy (2011) director Kevin Tancharoen was going to direct the film with Oren Uziel, who wrote the original short film Mortal Kombat: Rebirth writing the script with shooting was expected to begin in March 2012 with a budget of well under $100 million and a release date of 2013, coordinated with the next installment of the video game series being produced by the same studios but it was later delayed due to budget constraints but Tancharoen left after making season 2 of Mortal Kombat: Legacy (2011).
In June 2009, a bankruptcy court lawsuit saw Lawrence Kasanoff suing Midway, mentioning that a third film was in the works. Warner Bros. (which became the parent of New Line in 2008, after over a decade of both operating as separate divisions of Time Warner) ended up purchasing most of Midway's assets, including Mortal Kombat, the next month.
A planned third Mortal Kombat film was going to be developed, called "Mortal Kombat: Devastation" with Christopher Lambert, Linden Ashby, Adoni Maropis, Robin Shou, Chris Casamassa, Keith Cooke, Lynn 'Red' Williams and Cary-Hiroyuki Tagawa were hired to be in the cast as Lord Rayden, Johnny Cage, Quan Chi, Liu Kang, Scorpion, Sub-Zero, Jax and Shaung Tsung, respectively. Talisa Soto and Sandra Hess were in talks to reprise their respective roles of Princess Kitana and Lt. Sonya Blade. Mathew Marden was said to have been considered for the role of Kurits Stryker while Dolph Lundgren was in talks to portray Shao Khan. mink was hired to direct with Drew McWeeny from Ain't it Cool News and his writing partner Scott Swan working on the script, and then Russell Mulcahy was hired to replace him. Sean Catherine Derek and Lawrence Kasanoff took turns writing the script, which would have had Johnny Cage resurrected to help the heroes against Quan Chi and a resurrected Shang Tsung. According to Casamassa, production was halted when Hurricane Katrina destroyed most of the sets and the film ultimately never happened, However, plans for a third film fell through and the film rights went to Warner Bros. in favor for the reboot.
The film's rumor plot follows "a lowly unlucky supermarket employee who discovers that he has out of this world powers and must decide between good and evil, even though the evil side has helped him discover his true potential and who he really is."