Developed by Silicon Knights, Eternal Darkness has a cult following among Nintendo and survival horror fans. It was believed that a sequel was previously in development at the studio alongside X-Men: Destiny.
Late last year it was reported that Silicon Knights had been reduced to just a handful of employees following cancelled publishing deals and failed lawsuits which sparked a brutal redundancy operation.
Alleged ex-employees revealed that the studio had created "one two-level church interior" for Eternal Darkness 2, while painting the picture of a troubled project.
"It was really bad, as I recall," one said. "It took the side-team a long time to even get that far. Bad tech, combined with a team composed of people who had not shipped a title since Metal Gear really hurt that demo. Other than that, I can't explain why things went so poorly for them [except that] a lot of key people responsible for the original Eternal Darkness are long gone."
A number of cancelled Silicon Knights projects were later detailed, including Too Human 2: Rise of the Giants, Too Human 3, Silent Hill: The Box and The Crucible: Evil Within.