Nobody ever said game development wasn't a messy affair. A little over two years ago, Terraria Otherworld was first announced, a space-set spinoff of Re-Logic's pixelated survival darling Terraria, developed by Engine Software, the Dutch team that helped bring Terraria to Xbox 360, PlayStation 3, and PS Vita. Yet, after months of radio silence, it has been announced that the title's development has been completely halted, and will begin anew with a whole new development team via an official statement on the Terraria Forums by Re-Logic community manager Ted 'Loki' Murphy.
While the announcement may seem sudden, it's hard to imagine any other course for the project besides outright cancellation. The last time Re-Logic spoke about the project was back in July of 2016, where it was announced that Re-Logic staff reviewed the game's development at the start of the year to see if it met the studio's "standards, expectations, and visions for the game.". Unfortunately, they were not pleased. According to Loki's post at the time, "It was pretty clear to us at the time that Otherworld needed quite a bit of work - and even a good bit of rework - in a number of areas in order to hit that mark."
Apparently, that work was not enough. After reviewing the current state of the game, Re-Logic has given the project to Pipeworks, the studio that brought the original Terraria to Xbox One and PlayStation 4 as well as the upcoming Nintendo Switch port. Re-Logic will be supervising them as they rebuild the game, to make sure the title "fits with our high expectations and core vision for this project.". There was no mention of Terraria 2.