From the announcement:
"Our team has a clear vision for this game – one that we shared with all of you with much shared excitement – and, in spite of all of our efforts, the current state of the game remains equal parts far from that vision and beyond behind schedule from our initial planning when we shared Otherworld with all of you three years ago. Progress has absolutely been made during that time – but unfortunately, a very thorough status review of the game versus its intended design showed both the Re-Logic and 505/Pipeworks teams that things were quite a bit further away from the finish line than we had imagined. Taking the massive amount of work that would be remaining to complete along with the extensive time it would take to get that done, and how that would greatly interfere with the pursuit of other projects on behalf of Re-Logic – it becomes clear that this leaves things in a very undesirable state.
As a result, we have made the decision to terminate development of Terraria: Otherworld."
I'm disappointed because it looked very interesting, but I'm not surprised. They've been open about all the development issues that have plagued the game, and it seems as though they were never quite able to manage those issues.
They also shared the next steps for Re-Logic:
- In hindsight, it goes without saying that we never should have spoken publicly about this game as early-on as we did. We will fully own that error in judgement. Moving forward, we will be far more judicious about only sharing information on projects in which we are fully confident in regards to timing, etc. We can only apologize for all of the emotional rollercoaster this caused.
- Trying to outsource development of such a critical title for our company – even if just in part – was not the way to go. Moving ahead, our focus for the core development of new/future titles will be more inward and will seek to utilize our own people. We will share more information there just as soon as we have it.
- Re-Logic has possession of the game (design, code, art, sounds, etc.) as it exists today, and there are still a ton of amazing ideas under the hood here – many of which have never been publicly shared. These are ideas that we have not and will not forget and that you will very likely see implemented in our future titles.
- Active development of Terraria continues - 1.3.6 is still very much in active development. We know that we have not shared a lot in the way of spoilers there – but rest assured that the team has been working tirelessly on our next PC wave.
- This keeps our partners at 505/Pipeworks wholly focused on Console/Mobile/Switch – and there is still a TON to get done there, so that should be good.
Overall I see this as simultaneously disappointing and good news. We may never see what might have been, but we can stop wondering about it and look forward to what Re-Logic has for us in the future.
Full announcement: https://forums.terraria.org/index.php?threads/this-is-the-end-otherworld-development-cancelled.68594/