Rumor: Surreal's This is Vegas canned by Warner Bros.

Looks like Surreal Software's This is Vegas may have been canceled after Warner purchased the firm from Midway, if sources close to the developer are correct.

Speaking with CVG, a "cast iron source close to the project" claims Surreal was "quietly shut down" last year, amid lay-offs and restructuring of Midway Chicago into WB Chicago.

The source also claimed Midway spent over $40 million on the action title, and while next to nothing has been heard of the game since early 2009, Warner told G4 last August that it was "still in development".

"Apparently the entire This is Vegas project has been totally canned," said the source. "Midway spent in the region of $43 million up to the point when it was being sold to WB. Alan Patmore, who was [Surreal] studio boss, either left or was let go - but considering the resources and art created this is a lot of work down the drain.

"It was moving along to a point where the title was on the schedule for release late last year - but still needed another eight months to a year to finish with a studio burn rate of $250,000 per month."

Yikes.

Snowblind Studios was also part of the Midway purchase, and while it also suffered some lay-offs, the developer is currently working on Lord of the Rings: War in the North for Warner.

We'll send Warner a mail and see what we can find out for you.

Thanks, BigDownload.