The Tomb Raider studio is reportedly undergoing restructuring as Embracer Group looks to cut costs.
New reports have flagged Gearbox as the next studio to potentially depart the Embracer Group umbrella.
Embracer Group announced the decision as part of its company restructuring program.
The collapse of the deal led to a major rescope at Embracer Group, and the closure of some divisions.
The Swedish game publishing giant has ballooned over the last few years, but the collapse of a lucrative partnership has caused a shift.
The Swedish publisher says it has plans to exploit The Lord of the Rings franchise 'in a very significant fashion' with new video games.
Embracer announced the collapse of the deal in its quarterly earnings report.
A new Lord of the Rings MMORPG is in the works, helmed by Amazon Games, developer of the highly successful MMORPG New World.
Plaion will reportedly drop its individual publishing labels for a merged brand going forward.
Embracer Group reportedly has 11,152 developers working on 224 unique video games.
