So the news is blowing up all over Twitter and your favorite blogs: Activision has canceled True Crime: Hong Kong and is putting the Guitar/DJ Hero and Tony Hawk franchises on ice for the time being. Layoffs are being reported at DJ Hero developer Freestyle Games and apparently other Activision-owned studios, with Wired’s Game|Life blog reporting somewhere around 500 affected at this point. The Hero and Hawk changes aren’t a surprise — Guitar Hero: Warriors of Rock tanked, despite being a pretty good iteration of a fading franchise, and DJ Hero 2 similarly failed to find an audience, though that series should’ve been on the upswing (quality-wise, it definitely was). I don’t think I have to say anything about the state of the Tony Hawk franchise.

But particularly shocking is the announcement that True Crime: Hong Kong, the open-world action franchise reboot handled by United Front Games (of ModNation Racers semi-fame) in Vancouver, will not be released. As you may deduce from reading this blog or my Twitter, that hits particularly close to home for me since I’m by all evident accounts the last North American writer to see the game. I visited the studio in early December to write a six-page print feature for the February 2011 issue of Electronic Gaming Monthly, as well as a cover story for the EGMi digital magazine (which hit last week) containing a separate preview and an interview conducted over the phone in early January to supplement it.

I didn’t get a chance to play the game during my visit, but it was pretty playable — alongside a couple of international journalists covering for their respective outlets, I had a chance to see the game in action, as well as view several presentations that went over the game’s content and see all sorts of design docs and progress reports. It still needed a few more months of polish, as was scheduled, but the game looked promising and seemed ambitious in parts. And just like when I visited the studio a year earlier for a ModNation Racers preview for another outlet, you could really sense their enthusiasm for the project. Much of the team had ventured to Hong Kong to try and create an authentic experience that avoided stereotypes (both cultural and genre-related) and maintained the authentic feel and flavor, and the team had been built specifically for the project, recruiting folks with experience making open-world, action, or racing games.

I can’t say with any certainty that True Crime: Hong Kong would have been great, despite coming away from the visit feeling positively about what I saw. Would it have been a GTA-killer? My gut instinct is “no” (based more on Rockstar’s pedigree than anything), but it looked like it could’ve been a lot of fun, and aspects of the experience seemed really interesting and worthwhile. But this was a game that Activision had surely poured millions and millions of dollars into, and United Front’s large team had no doubt invested a lot of time, love, and attention into. It was probably six months away from hitting store shelves; why not take a shot at finishing it and let the market judge it? If the money’s already been spent on development and early marketing, why cancel it at this late of a stage? Even if the game didn’t seem to be on track for a high Metacritic score or whatever benchmark the publisher couldn’t see it hitting, less-than-amazing games routinely sell millions of copies, especially violent action games with a recognizable brand attached to it.

I understand the desire to not release a game that wasn’t up to expectations, especially for a franchise that started on shaky ground prior to this fresh reboot attempt. But what’s worse: the public perception resulting from releasing a game that didn’t quite match ideals, or being unable to see an original project through to completion, despite years of investment and work? From a business perspective, especially with Activision being a public company, I can certainly understand the need to dissociate itself from a potential flop before it happens in the public eye. But Activision’s continued, blockbuster success with Call of Duty and World of Warcraft should lead to taking chances on other ideas and supporting new and revitalized IP — not just canning projects that don’t seem to be A-#1 prospects. Among the positive revelations in today’s call (primarily focused on Call of Duty-related features) was the mention of new Family Guy and ABC’s Wipeout games — safe, surefire licensed fare.

But at the end of the day, True Crime: Hong Kong is canceled and appears unlikely to reemerge in another form. A Twitter follower asked if United Front could release the game under a different title, but it’s Activision’s brand, and I’m not sure who owns what assets in the deal. Perhaps Activision could shed the license and someone else could publish the game, but otherwise, the best case scenario is probably that United Front uses some of the ideas in a completely original game for another publisher. I certainly wish them the best with whatever unknown project they were working on elsewhere in the studio (we weren’t privy to that floor of the building), and honestly hope it’s with a publisher that doesn’t throw in the towel when a game seems unlikely to move mega-millions.

And with today’s news, my print feature and digital coverage become nonessential, though as recently-met pal and industry consultant Anibal Arocho pointed out on Twitter, it’s “now a historical document” on this now-canceled game. I suppose that’s true. But it shouldn’t have to be that way.