The studio that was to develop the Xbox One remake of cult hit Phantom Dust has been dropped from the project.

In a statement, Microsoft said that it has ended its relationship with Darkside Game Studio, but that development of the game would continue elsewhere.

Darkside assisted on games including Sunset Overdrive, Borderlands: The Pre-Sequel, and Gears of War: Judgment, but Phantom Dust was to be its first title lead title.

"Microsoft partnered with Darkside Game Studios in the development of Phantom Dust, but our working relationship has now ended," a Microsoft spokesperson said.

"We have great respect for their studio and their work in the industry. While we do not have anything new to share on Phantom Dust at this time, we can confirm that development of the title continues. We look forward to sharing more details on the game as we get closer to release."

Meanwhile, Kotaku sources claim that Darkside will shut down, costing around 50 people their jobs.

The original Phantom Dust was a card-based action-strategy game released in 2004 by Panzer Dragoon director Yukio Futatsugi.