Warrior's Lair -- previously known as Ruin -- has not been canceled. We followed up with the publisher last week after forum murmurings (some since deleted) claimed the game had been canned and over half the staff at developer Idol Minds were let go.
To the first point, a Sony representative plainly stated, "Warrior's Lair is still in development; it isn't cancelled."
As to whether the game is still in development at Idol Minds and if there were any layoffs? Idol Minds has not responded to our request for comment.
Warrior's Lair was revealed at last year's E3 as a Diablo-style RPG with interesting social features.
Update: Idol Minds is no longer on the project. Still no word from the company about layoffs.