Microsoft has cancelled its planned Massively Multiplayer Online Role Playing Game (MMORPG) Mythica, blaming the "incredibly crowded" MMORPG market.
In a statement on its mythica.com site, Microsoft Game Studios said the cancellation would mean the loss of up to 40 jobs.
The company had decided to streamline its portfolio, making fewer investments in this genre, it said
Mythica was under development, with an alpha version due out soon, and had built up a core of fans despite not yet being available.
"There was a lot of excitement about it, as it was known to be nearing the alpha milestone," a Microsoft spokesperson said.
No decision hads been made on whether another publisher could pick up and develop the game, she said.
On Mythica forums, the mood is gloomy, with developers and community relations manager, Lila Yee, joining fans to discuss their disappointment at the decision.
A petition has begun to try to persuade Microsoft to change its mind about the cancellation.