Developer Re-Logic last week announced on their official forum that development on Terraria Otherworld has been cancelled. The strategic spinoff of Terraria was announced back in 2015, but suffered from many problems during its development and was even handed to an external studio.
"Our team has a clear vision for this game - one that we shared with all of you with much shared excitement - and, in spite of all of our efforts, the current state of the game remains equal parts far from that vision and beyond behind schedule from our initial planning when we shared Otherworld with all of you three years ago", Re-Logic wrote in a statement.
"Taking the massive amount of work that would be remaining to complete along with the extensive time it would take to get that done, and how that would greatly interfere with the pursuit of other projects on behalf of Re-Logic - it becomes clear that this leaves things in a very undesirable state."
Re-Logic will continue working on the development of Terraria.