Paradox Interactive issued the following statement:

It will not see the light of day under the current set up: Universo Virtual (UV) will not be part of this project any more.

The reasons for cancelling the contract with Universo Virtual include the following:

• Lack of progress; we have seen this project drag on and the code we have gotten has not shown significant improvement for many months. Some old and known problems persists and new ones appear with each delivery.
• Lack of trust; the leadership of UV has given a sunshine version of the project to Paradox and reacted with irritation and anger when we have pointed out obvious problems with the deliveries. It has come to a point where they claim the project is done, and the game is ready for release – despite the many critical issues found and reported on our end.
• Internal strife within the MM team; we have gotten information from members within the MM team desperate to save the project whom report to us that the project lacks active leadership. Key personnel in the project see what Paradox sees but instead gets silenced by the UV leadership.

All in all, these are not circumstances under which we can work with a team and it will now stop. At this point we have no more news than the above.

On the flip side, developer Universe Vortual is not going to take this laying down and also made a statement:

Greetings Magna Mundi fans,

I am just writing this post to let you know that Universo Virtual and myself will answer in the proper legal forum to the weird "cancellation" of the game. I'd also like to make it known the "cancellation" issue is just a detail on everything that's going to be settled there.

I am not going to allow that my name and my credibility are to be placed in jeopardy as they have been for some time now. I intend to come out of this with a big smile in my face and my name clean.

In the following days Universo Virtual legal team will make a public statement about this issue.

Thank you for your support,

Carlos Gustavo Benavente