Yes, and they're even thinking about a cooperative mode....if that happens, they'd have to introduce another character...hmm. 
Also, since Sony's finally settled its dispute with Immersion, the creators of God of War are saying this new one will have SIXAXIS features and rumble features.

Also, since Sony's finally settled its dispute with Immersion, the creators of God of War are saying this new one will have SIXAXIS features and rumble features.

God of War III is to be the fourth installment in the God of War video game franchise. It is to be released for the PlayStation 3 video game console, with a tentative release date of 2009. It is the fifth chapter in the series chronologically, after God of War: Chains of Olympus, God of War,God of War: Betrayal, and God of War II.
Though little is known about the game at this point, it was confirmed to be in development by Cory Barlog at a God of War II launch event. He revealed that the game would run at full 1080p HD resolution, and the game would support SIXAXIS tilt and vibration functions. This statement was rather odd as the SIXAXIS controller does not currently support rumble; however, Sony executives have settled their dispute with Immersion, who are responsible for the rumble technology in both PlayStation and PlayStation 2 controllers and have agreed to integrate rumble technology to PlayStation products. This means that the rumble feature will be added to a future version of the current PlayStation 3 controller, like its predecessors. Barlog also expressed an interest in adding a cooperative mode "if we can do something unique with it". [1]
It was mentioned in a recent interview that God of War III will explain why there are no more Greek gods.