After a morning of rumors regarding the fate of Platinum Games’ Scalebound, Microsoft has officially announced that development of the action-RPG has been cancelled.

Scalebound has been one of the most highly anticipated titles for the Xbox One ever since its announcement during Microsoft’s keynote presentation during E3 2014. The third-person action RPG was being directed by Resident Evil 2, Devil May Cry, and Bayonetta director Hideki Kamiya. It involved fighting alongside and riding a giant dragon. Yet despite the anticipation, Microsoft has now officially announced that Scalebound’s development has been cancelled.

Both Kotaku and Eurogamer reported earlier today that Scalebound had either been cancelled or was likely to be cancelled soon, with development to cease entirely. They even reported that Microsoft was working on an official announcement to be delivered extremely soon. Microsoft has since followed through, releasing the following statement:

“After careful deliberation, Microsoft Studios has come to the decision to end production for “Scalebound.” We’re working hard to deliver an amazing lineup of games to our fans this year, including “Halo Wars 2,” “Crackdown 3,” “State of Decay 2,” “Sea of Thieves” and other great experiences. For more information on our 2017 plans, please visit: https://news.xbox.com/2017/01/05/xbox-closes-milestone-year-in-2016/.”

Microsoft was already in the process of announcing the game’s cancellation prior to rumors starting earlier today. For one, the official profile for Scalebound on Xbox.com was removed. Similarly, the game was absent from a recent Xbox Wire article that listed Xbox One titles to look forward to in 2017 — the link acknowledge in Microsoft’s statement. Officially, Microsoft is citing “business decisions” for the game’s cancellation, which lines up with the suddenness of the announcement.

Rumor: Scalebound Cancelled - Dragon

Eurogamer provided some additional insight into Scalebound‘s development problems that likely resulted in its cancellation in its reporting on the cancellation rumors earlier today. According to sources, several key members of the development team took month-long leaves of absence due to exhaustion towards the end of 2016. With development speed already falling behind, as we know Scalebound was delayed out of 2016 previously, the schedule took another major hit and Microsoft ultimately came to today’s decision.

It’s unclear whether or not Scalebound‘s developer, Platinum Games, could continue development of the project independently or with another publisher, or if Microsoft’s publishing agreement prevents that. Either way, the report is that for now Scalebound development as entirely ceased. It’s rare if not unheard of for a project to cease development entirely like Scalebound reportedly has and then restart at a later date. Platinum Games is likely to have already moved staff around to other projects like Nier: Automata.

Scalebound‘s cancellation is an unfortunate event considering Microsoft’s 2017 line-up of upcoming Xbox One exclusives is somewhat thin. Though if the Xbox One upgrade, the Scorpio, does end up being released in 2017 then Microsoft almost certainly has some surprises hidden up their sleeve.

Officially, Scalebound, previously planned for release on Xbox One and PC in 2017, is now cancelled and has ceased development.