Square Enix have shut down Studio Istolia and cancelled the new-ish team's only known game, a JRPG named Project Prelude Rune. This has been a short and unspectacular life for the studio. Squeenix announced Istolia's opening in February 2017, with former 'Tales Of...' producer Hideo Baba in charge, then showed only wee snippets of Prelude Rune since. They say they're working to get Istolians jobs on other Squeenix games, so that's good at least.
"Following evaluation of various aspects of Project Prelude Rune, development of the title has been cancelled," Squeenix confirmed to USgamer yesterday. "Studio Istolia is no longer in operation and we have been taking appropriate steps to assign studio staff to other projects within the Square Enix Group."
Hideo Baba had already stepped down as head honcho in December 2018 then resigned from Square Enix in March, Famitsu reported (in Japanese).
Some have suspected something was up because, on top of that, Square Enix had been wiping their webs clean of Studio Istolia. They've taken websites offline, deleted social profiles, removed videos from YouTube, and all that. Now we know why. Internauts have inadvertently archived bits, like this trailer from the Tokyo Game Show in September 2018:
Which isn't much to get a sense of what the game was or could be.
"The project aims to build a new RPG with a new fantasy: unfolding across a vast land teeming with life," Square Enix said in 2017. "Nurtured by the earth, the many peoples of this land dare to dream, fighting for what is just--and this is their tale."
So it was a some sort of RPG. Mind you, "dare to dream" is the slogan of the Eurovision Song Contest this year and THAT'S a game I would've liked to see.