April 25, 2012 12:00 PM | Danny Cowan
An update at the project's Facebook page cites the loss of key staff members and "internal conflicts" as reasons for the cancellation, as the team's former lead programmer refused to share source code needed to continue development.
Last month's demo release was initially met with an enthusiastic reception among fans, followed by widespread criticism due to its inclusion of DRM and a suspected keylogger trojan. The remake was never in a publicly playable state beyond the game's first zone.
"Hopefully, another group in the Sonic community will pick up the torch and go forward with the vision we had over a year ago -- not just creating a Sonic 2 remake, but creating entirely original content," project leader Vincent writes.