Some folks were no doubt excited at the possibility of Spiderman and X-men rocking on the screen, cracking skulls and taking names. But it appears those fantasies will have to remain just that for now since Shane Kim from Microsoft Game Studios tells MTV:
I’ll confirm. Marvel and we have agreed to end development on the MMO. It was an amicable decision…. It’s just something that we felt that, for us and for them, it would be better if we ended development. Which is disappointing, because that had a lot of promise. But sometimes you have to make these decisions.
When asked what went wrong:
It’s a tough space. It’s a very competitive space. And it’s a space that’s changing quite a bit. …When we first entered into the development and agreement of the development of ‘Marvel Universe Online,’ we thought we would create another subscription-based MMO.
Kim goes on to beat around the bush on difficulties in trying to find the right model to generate revenue and be competitive in a World of Warcraft universe.
That article linked above also has inside info on Gears of War2, Mass Effect, Halo Wars RTS and Fable 2.