Recent rumors regarding the cancellation of a high-budget game developed by Wizards of the Coast's subsidiary, Skeleton Key, have been confirmed by Hasbro.  However, the initial reports didn't capture the full picture.  Skeleton Key, based in Austin, Texas, isn't facing closure despite the project cancellation.

Established in 2022, Skeleton Key currently employs around 50 staff members. While originally part of Hasbro's expansion into gaming, the studio's first AAA project has been shelved. This was initially revealed through a social media post by a former employee.

Wizards of the Coast Digital Games SVP Dan Ayoub confirmed the cancellation in an interview, emphasizing that Skeleton Key remains operational and that the initial reports were incomplete.  Instead of abandoning the studio's only project, Wizards of the Coast has chosen to consolidate its resources.  "There were two projects underway at the studio, and we've redirected the team's focus to the other title," Ayoub explained.

Addressing reports of layoffs, Ayoub confirmed that some staff were affected but clarified that the "vast majority" of those working on the cancelled game have been reassigned to the remaining project. This kind of staff reallocation is common practice within the games industry when a project is cancelled.

The cancelled game was an unannounced horror title, in development since around 2022. Details about the remaining project are scarce, but it's confirmed to be led by Corinne Busche, former director of Dragon Age: The Veilguard, who joined Skeleton Key after leaving BioWare in early 2025.

Given the project shift and Skeleton Key's relatively small size for a AAA studio, a near-term release for the remaining game appears unlikely.  The next Hasbro game expected is Archetype's Exodus, a sci-fi ARPG originally announced in late 2023 and still slated for a 2026 release, according to Ayoub. Hasbro also has other projects in development, including Baldur's Gate 4 and a new Dungeons and Dragons game from Invoke Studios (formerly Tuque Games) in Canada.