'Armada of the Damned' was supposed to be released in 2011

Even as Disney lenses the fourth “Pirates of the Caribbean” feature in Hawaii, the Mouse House has pulled the plug on a high-profile videogame version of the franchise in Vancouver.

Disney Interactive Studios said Thursday it has canceled “Pirates of the Caribbean: Armada of the Damned,” which Disney-owned Propaganda Games had been readying for release next year.

Propaganda is also behind the studio’s upcoming “Tron: Evolution” game, which will still launch Dec. 7, before the bow of the “Tron: Legacy” pic Dec. 17. The company will continue to produce downloadable components for the game after its release.

Because of the move, Disney said Propaganda was being restructured, and one of the company’s two development teams would be eliminated, resulting in an undisclosed number of layoffs. Some reports put it at about 100 staffers.

For now, Propaganda will focus on the “Tron” game.

Plans for “Armada of the Damned” were unveiled last year. Move to cancel the title was a surprise since Disney devoted a considerable amount of resources at L.A.’s E3 videogame confab in June to promote the game, complete with weathered shack to resemble sets from the game, pre-release trailers on massive video screens, signage and gameplay –as much marketing fuel as it gave “Tron: Evolution” and “Epic Mickey,” both still on course for release.

Decision follows Disney’s hiring of Yahoo entertainment programmer James Pitaro and John Pleasants, CEO of social gamemaker Playdom, to head up the Mouse House’s interactive efforts as co-presidents, earlier this month (Daily Variety, Oct. 4).

Disney brass have become increasingly vocal about wanting to focus more on making inexpensive and highly profitable online games for sites like Facebook.

And the “Pirates” game certainly wasn’t cheap, with its vast world and high-end computer graphics. The role-playing title would have enabled a gamer to become a pirate and explore its world on foot and via ship.

Title’s plot was set before the events of the first “Pirates” film. Disney had already launched a “Pirates of the Caribbean Online” virtual world and “Pirates of the Caribbean: The Curse of the Black Pearl” game.Disney acquired Propaganda in 2005 and at the time, the company was best known for “Turok,” a dinosaur-blasting game.

(Michael Sullivan contributed to this report).

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