"Our team had a clear vision for this game – one that we shared with all of you with much shared excitement – and, as much as we hate to say it (and in spite of all of the reforms we tried last year) - the current state of the game is still equal parts far from that vision and well behind schedule.
As a result, we have made the decision to move on from having Engine Software continue development of Terraria: Otherworld.
The great news is that we already have a dedicated and passionate team ready to pick up the torch and continue the Otherworld journey! Based upon their really impressive work to-date with the Terraria re-write on Console/Mobile, coupled with an amazingly on-point proposal for completing Otherworld (after a thorough review of the game on their end), we have made the decision to bring Pipeworks on board as our new development partner for Terraria: Otherworld!
We know that the "radio silence" and all of the shifting development work aimed at continuing the journey for Terraria: Otherworld has been frustrating for a lot of you.
The length of the silence was purely driven by "these things take time to occur and then set up" coupled with our desire to have an actual solution/path forward before just sharing the news about Engine."
This is good news, really. We now understand the long gaps between updates, and we know that Re-Logic is moving forward with a new team. The bad news would be if they had just pushed on. I'm more optimistic now, knowing that Re-Logic is taking care of things and bringing in some fresh eyes.
Full statement on the forums: https://forums.terraria.org/index.php?threads/changing-of-the-guard-an-update-from-otherworld.56207/