With the upcoming release of next summer’s Pirates of the Caribbean: On Stranger Tides, a spokeswoman for Disney Interactive Studios, Walt Disney Co.’s video game division confirmed that Pirates of the Caribbean: Armada of the Damned, which had been scheduled to come out next summer, has been canceled.

Along with the cancellation of the game came layoffs at Propaganda Games in Vancouver.  Propaganda is the studio that was working on the game and had spent millions on production of the game, which has been in development for the last few years.

Reportedly, about half of the 200 employees at Propaganda were laid off while the other half are finishing work on Tron: Evolution which is due out in November.

For those who might not have heard about Armada of the Damned, I’ve posted the trailer that was released at this year’s E3 for the game.  I have to say, the thought of using an anchor as a weapon looks pretty appealing to me.  But alas matey, it shall never be…

The game was originally slated for release on PS3, X-Box 360 and PC.  Here’s the game’s description:

Live to tell the tale of becoming a notorious pirate captain or suffer a fate of eternal damnation.  Pirates of the Caribbean: Armada of the Damned is an epic, action role-playing game that offers an entirely new experience within the Pirates of the Caribbean universe.  The game takes place before the events of the blockbuster films.  Players will take on the role of a pirate and embark on epic land and sea adventures.  Numerous moral and character choices will need to be made that affect their character and the original story within the world.  Players will explore a massive open world while fighting enemies, mystical creatures and Mother Nature, both to gain experience and stay alive.  Supernatural elements familiar to the Pirates of the Caribbean world will also affect their character’s story and influence their choices.