Hey Mabbo,
Since you've made a list, let's talk about the points you've brought up!
Not enough good, solid ideas for the skin
You're correct that we'll sometimes come up with ideas we think are awesome, and once we begin exploring that thematic, we find that it isn't as strong, or doesn't fit with the champion we were working with.
If this is the case, we usually figure it out during the concept phase, which means a skin isn't far along in production before we decide it won't work out.
More prioritized skins that have to be made
There aren't any skins that 'have to be made' per se. Sure, we keep a list of champions who haven't had a skin in a while, but if another champion fits a thematic better, we wouldn't not go forward with the idea because x champion is on the list.
For example, if we're looking at creating Harrowing skins, and let's say hypothetically Zed is next in line for a skin, but another champion fulfills the thematic for this year's Harrowing, we won't force Zed into the theme if he doesn't work, and we'd let the other champion have a skin for the event. That said, we'd look for opportunities skins that would work well with Zed, perhaps on his own, rather than with a group of skins for an event.
How hard it will be to make those skins
We've certainly run into some challenges while creating skins, especially skins that require us to create new tech. DJ Sona was a huge exploration of new tech for us, which meant trial and error, and getting extra testing so she wouldn't explode. :D
While sure, some champions are harder to make skins for than other (Annie versus Zyra), we're totally game to make it work if there's an awesome skin concept.
We're willing to make it happen, regardless of difficulty, as long as it's an awesome skin idea.
I'm assuming that it really depends on how much time and effort it will take to make these skins, and finding out how much they will cost
I touched on the first part of this above, but I'd like to clarify the price aspect of this.
When we create skins, we don't think in terms of pricing on the development side; we think in terms of scope. What does that mean? When we have a new skin or skins that we're working on, we think about what that thematic is, and what kinds of bells and whistles (audio, particles, etc) it would need to really fulfill the fantasy. For some skins, it's a new model/texture (like Warden skins), and for some, we need new everything (DJ Sona), and for some, a little bit of in between works for them (Pool PArty Draven).
Think about it this way, Kat has so many skins, and if someone already has 2-3, there isnt much of a reason for them to buy another unless its way better than the last (which means more work)
Kat's one of our older champions, and you're right, she certainly has a solid backlog of skins. That said, if there's an awesome legendary concept for her, it wouldn't be a black mark on her record that she has a good chunk of skins already. That said, we wouldn't want to use x amount of time creating 10 Kat skins because there are other champions who need skins too.
To go back to the OP -
I'm just wondering how common is it for your team to cancel or shelve skins?
Honestly, it's not super common that we'd completely cancel a skin. We have shelved content in the past (and that's usually what happens - we hold it for a more appropriate time, or we come back to it later to re-evaluate and improve the original concept). A good example of shelved skins are Guardian of the Sands Rammus/Skarner/Xerath. (This is why we don't discuss skins that may have been cut/shelved - there's always a chance we may want to revisit the idea in the future.)
What are the reasons for it and how far in the creation process do you decide to do it.
As I'd mentioned above, it's usually in the concept phase, before a ton of work is done on it. That's usually when we find where x, y, and z won't work with the skin. If we find that something won't work, we usually try to find work arounds, but there are cases where something won't work, and because of that, the skin thematic becomes less cohesive or strong. That's the other reason skins don't work out - the thematic isn't strong for the champion, or if it's a new skin line, isn't strong in itself.