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After yesterday's mysterious disappearance of Studio Istolia and its game, Project Prelude Rune, from various forums, Square Enix has confirmed to USgamer that the studio is no longer in operation and its game is canceled.

"Following evaluation of various aspects of Project Prelude Rune, development of the title has been canceled," a spokesperson told USgamer. "Studio Istolia is no longer in operation and we have been taking appropriate steps to assign studio staff to other projects within the Square Enix Group."

Studio Istolia was founded in 2017 to make a new RPG called Project Prelude Rune. Helmed by Hideo Baba, a former producer for Bandai Namco's Tales Of series, the studio sought to "provide unforgettable stories that will inspire players in their own lives, and brings new experiences to everyone around the world."

Project Prelude Rune was on track to be an attractive new game from a former Tales producer. | Studio Istolia

The studio hit rough waters when Baba departed to "make room for the next generation." All that was seen of Project Prelude Rune remains some concept art and a trailer, now deleted from Square Enix's YouTube channel.

Square Enix has also seen shifts in other studios trying to develop original IP like Luminous Productions, which lost director Hajime Tabata to personal ventures and is now working on its own unannounced original title. No word yet on whether this specific branch or others will be absorbing studio staff from Istolia.