Disney cancels Pirates of the Caribbean: Armada of the Damned; Propaganda suffers layoffs

A Disney Interactive representative has confirmed to Joystiq that Pirates of the Caribbean: Armada of the Damned has been sunk down to Davy Jones' locker and will not come to port in 2011 ... or ever. The confirmation comes following rumors reported by Kotaku that the game had been canceled and layoffs had occurred at developer Propaganda Games.

In a statement (in full after the break), Disney Interactive explains that a "restructuring" has occurred at Propaganda Games, "affecting one of the studio's two development teams." Propaganda is still working on this December's Tron: Evolution and its post-release DLC.

Disney Interactive statement:

Disney Interactive Studios confirms the cancellation of the Pirates of the Caribbean: Armada of the Damned video game which was scheduled to be released in 2011. As a result of this decision, Disney Interactive Studios completed a restructuring of Propaganda Games, its Vancouver, BC internal studio, affecting one of the studio's two development teams.

The studio is still in active production of Tron: Evolution, the video game, which will be released on December 7, 2010 with additional DLC (downloadable content) support following the game's release.