First released in Japan in 2004, Phantom Dust was a card-based action game developed and published by Microsoft. The game was strategic and tactical and saw players build up and manage an 'arsenal' of skills to battle against other players and complete missions, as they also try to discover why the Earth has become such a wasteland. With 'Auras', 'Environmental Crystals' and all manner of skill types (including optical, nature and ki skills) Phantom Dust was a remarkably Japanese game and so it was a surprise when fan demand saw it published in North America in 2005, especially as Microsoft had initially cancelled the North American version.
Although the game didn't sell massively well when it was released in the West (estimates suggest it shifted about 100,000 units or so), reviews were incredibly positive and Phantom Dust gained cult status. That's why fans were so delighted when the game made an appearance at E3 2014 where Microsoft announced that a new Phantom Dust game would be coming to Xbox One.
Today, however, Microsoft has announced that the developer in charge of the new Phantom Dust game, Darkside Game Studios, will be closing down and all 50 employees are being let go. While it's unclear why, Microsoft has also cancelled Darkside's version of the game and another, yet to be announced, team will carry on with development of the reboot.
A Microsoft spokesperson explained:
"Microsoft partnered with Darkside Game Studios in the development of 'Phantom Dust,' but our working relationship has now ended. We have great respect for their studio and their work in the industry. While we do not have anything new to share on 'Phantom Dust' at this time, we can confirm that development of the title continues. We look forward to sharing more details on the game as we get closer to release."
Meanwhile, one Darkside Game Studios employee who was laid off due to the company's shutting down explained to Kotaku that:
"The executives who saw it were impressed and as late as this morning gave our team every indication that the project was on solid ground. Yet we got the phone call today that someone up on high who in all likelihood wasn't even aware of the game in detail shut it down."
The uncertain future of Phantom Dust on Xbox One could become an issue for Microsoft. While Phantom Dust isn't the biggest of names, it could make all the difference, as the company tries to make up lost ground in Japan. Sales of the Xbox One in the territory have been particularly dismal (as of January, 2015 it was selling less than 500 units a week) and with Sony getting exclusive deals such as Destiny being a PlayStation exclusive in Japan, Phantom Dust could have been a very good way for Microsoft to prove that they are committed to meeting the needs of Japanese gamers.
The closure of Darkside Game Studios is undoubtedly a shame (and an example of the unfortunate side of the industry) so what happens to the employees who were laid off and the Phantom Dust reboot, will have to be seen.