The answer is to be found in this interview:
CHRIS. D: Did Toho originally plan to do two more films after Sword Of Doom? Or was it decided to just tell the first part of the story?
OKAMOTO: Originally Toho had planned to do it in two parts with a second part to come later. However, shortly before the release, the executives decided it would probably not do that well. So they stopped the second film right before it went into production.
CD: How did it do when it was released?
OKAMOTO: The box office was mediocre. You see, the Daiei version with Raizo Ichikawa [Satan's Sword], and the two versions from Toei had all been big hits. Toho had originally been expecting to do the same kind of business as the other companies’ versions. At the last minute, they had a premonition it wasn’t going to do that well. Then it came out and did do mediocre business. So in a way, they were right. But it was a very successful film overseas, especially the United States. When it first played in New York, there were lines around the block.
An excerpt from the book “Outlaw Masters of Japanese Film“
