All rights to action game Devil's Third have been returned to creator Tomonobu Itagaki and his Valhalla team, THQ confirmed to Eurogamer this afternoon.
Devil's Third had been put in the shop window and dropped from THQ's slate. In short: it wasn't expected to make as much money as some other THQ games.
"THQ confirms that the company will not be publishing Devil's Third," the publisher told Eurogamer. "All of the game's IP rights have been returned to Itagaki-san and the Valhalla team."
Tomonobu Itagaki is the leather jacket and sunglasses wearing creator of Dead or Alive, and resuscitator of Ninja Gaiden. He fell out with Team Ninja - the team he led - and owner Tecmo, and so, left. He formed Valhalla Studios and began work on Devil's Third.
THQ's confirmation comes after Tomonobu Itagaki told the latest issue of Famitsu Xbox 360 magazine that "we now own the Devil's Third IP".
"Most important thing is gamers' happiness. And people in business side like distributers and presses. And developers. It's a Happy Three. So we can't thank THQ enough. Anyway, we now own the Devil's Third IP," he told Famitsu, in an interview translated for Eurogamer (thank you, Sacra).
"THQ confirms that the company will not be publishing Devil's Third. All of the game's IP rights have been returned to Itagaki-san and the Valhalla team."
"Devil's Third development is in its final stage now, and is most expensive in this term. In the West, we need to spend a great deal for advertisements - as much as development cost - to sell a lot. But it wasn't fit for [THQ's] mid-term plan.
"They didn't want to part with this IP, but we all have to see into the future and at last they did, for us.
"We were anguished and they were really kind to us. Mr. Danny Bilson was searching for a way to work together until the very end. I do appreciate him and THQ managers that signed the transfer contract."
Valhalla has been working on Devil's Third since roughly 2009. The game was formally revealed in 2010.
But there have been development problems - chiefly, the middleware team supplying Devil's Third engine going out of business, which forced a costly tech-switch.
As such, we've never really seen solid footage of the game, just teasers starring a weird man.
Devil's Third has no release date.