Impossible Studios was working on iOS dungeon crawler Infinity Blade: Dungeons. The future of the project is currently uncertain.
The studio made up of former Kingdoms of Amalur developers, Impossible Studios, is being cut loose by parent company Epic Games.
Impossible Studios was formed when Epic hired the bulk of Big Huge Games following the bankruptcy of 38 Studios last year.
Epic Games founder Tim Sweeney made the announcement via the Epic games community site. 'When former members of Big Huge Games approached Epic last year, we saw the opportunity to help a great group of people while putting them to work on a project that needed a team,'
he said. 'It was a bold initiative and the Impossible folks made a gallant effort, but ultimately it wasn't working out for Epic.'
The project in question was Infinity Blade: Dungeons, which is now indefinitely on hold with the future of the title uncertain.
Reacting to the news, Irrational Games, the studio that is working on BioShock Infinite, has shown an interest in recruiting some of the Impossible staff with BioShock creator Ken Levine posting a link to the studio's hiring page on Facebook along with a comment about being a big fan of the original Big Huge Games.
38 Studios went bankrupt after defaulting on a bank loan shortly after the release of its first and only title, Kingdoms of Amalur: Reckoning. The game received a mostly positive critical reaction and sold 1.2 million units in its first three months.