The studio will be renamed Gearbox Studio Shanghai
The embattled project has been handed off to another Embracer-owned developer, according to a report from Bloomberg.
A string of acquisitions has led to the company acquiring the rights to games and movies based on Lord of the Rings. Analyst David Cole weighs in.
The country has been making a play for the games industry throughout the last year.
Embracer Group will receive some high-profile IP, including Deus Ex, Tomb Raider, and Thief, as part of the $300m deal.
The latest round of acquisitions gives Embracer a foothold in publishing, animation, and even TV streaming.
The deal will help expand Embracer's presence in the mobile sector and several others.
The company has 160 games in development and has sold over 6.8 million copies of Valheim