Project H.A.M.M.E.R. was supposed to be a Wii title which catered for the needs of serious gamers, thanks to its gritty setting and focus on intense destructive action. Developed by Nintendo Software Technology - the North American studio responsible for titles like Wave Race: Blue Storm, Metroid Prime: Hunters and 1080° Avalanche - Project H.A.M.M.E.R. entered early development in 2003 and was officially announced at E3 2006, but would endure a painful development process before its eventual cancellation in 2009.

Our friends over at Unseen64 have been speaking to various sources close to Nintendo Software Technology and the resultant report - which includes gameplay footage and CGI renders created by external studio Silver Ant for the game's cut-scenes - doesn't paint a pretty picture of working practices at the studio.

Project H.A.M.M.E.R. - which was referred to internally at NST as Machinex - went through several revisions over the years and was actually close to being finished at one point, but the same conclusion appears to have been reached on several different occasions - the core Wii Remote-smashing gameplay simply wasn't fun enough. There was even a point when the game was totally rebooted as Wii Crush, a cute title which retained Project H.A.M.M.E.R.'s destructive overtones, but little else.

Perhaps more worrying are the accusations levelled at Nintendo's higher-ups in the report, which hints at cases of racism within the walls of NST. The project was overseen by senior Japanese staff based in NST's offices, and this created a cultural issue for the game, which was clearly aimed at a Western audience.

According to Unseen64's source, Western NST staff found their ideas repeatedly ignored, even being told that they wouldn't understand the reasoning because "they weren't Japanese". Around the time the title shifted focus and became Wii Crush, NST staffers began leaving the company in droves. The game's head designer was unceremoniously fired, and was blamed by NST's senior Japanese management for the failure of the project. They seemingly took no personal responsibility.

Departing staff would directly accuse the Japanese NST staffers of "nationalism", and this forced Nintendo of America to step in and take charge. An internal review took place - the actual content of which Unseen64 is unable to divulge - but it can say that moral survey scores came back as a record low. In 2009 the game was formally cancelled, marking the end of five and a half years of fruitless labour for NST.

The end result, Unseen64's sources state, is that NST has now been reduced to a minor role within Nintendo's development hierarchy. While the studio is still active - its most recent title was Mario vs. Donkey Kong: Tipping Stars and it assisted with the creation of Google-powered app Wii Street U - it is no longer trusted with AAA retail releases, and may never be again. The talent which created some of the studio's most impressive games has long since departed, many leaving due to their experience with Project H.A.M.M.E.R. and its painful development.

The full video report is below, and makes for essential viewing.