Scalebound has been cancelled by Microsoft. Game developer Platinum Games though still has a lot of upcoming games lined up.
Platinum, Game Director Apologized
Both Platinum Games and Scalebound director Hideki Kamiya publicly apologized for the game's cancellation. Kamiya initially thought that he will get a roasting from disappointed Scalebound fans. He was surprised and posted his gratefulness for their warm response via Twitter. They promised to work harder but also mentioned a number of upcoming games to look forward to. One of their titles, NieR Automata is coming out this year.
The Granblue Fantasy Project Re:Link video preview also looks good in a Final Fantasy sort of way. Unfortunately, this game is coming out first in Japan and there's no word on a global release yet. Platinum is also developing a mobile game called Lost Order. The developer also did not release much information about it except that it's available for iOS and Android devices.
Possible Reason For Cancellation
There have been rumors about the possible reasons for the game's cancellation. It seems Microsoft and Kamiya have conflicting visions about the Scalebound project. The Bayonetta director had lofty ideas for the game but Microsoft wanted a more modest one. Some industry observers pointed out the 2016 E3 Scalebound video preview seems "underwhelming" compared to the previous 2015 Gamescom preview. Things got complicated when the project development stalled. At the same time, both developer and publisher developed communication issues. The strain may have been too great for both parties to talk things over.
Scalebound Status
So far, Microsoft, Platinum Games and Kamiya are silent about the future of the Scalebound project. It's quite possible that more than half of the game has been completed. We can assume this since the game is slated for a 2017 release. On the other hand, Microsoft may have cancelled the project because Platinum could not deliver the game on time. It's also possible that we will see Scalebound as a PS4 game instead of being an Xbox One exclusive.