The embattled Sonic 2 HD team consisting of ragtag programmers officially announced on Facebook that the project has been cancelled. It was found that the game contained a keylogger, and this news spread fast, which effectively killed any sales potential of the game.

No point in making the game now, right? I feel sorry for them, but these guys do not understand the concept of teamwork as their lead programmer called “LOst” had stolen the source code and held the team at ransom.

You can read their official statement here.

The bad news for the project far outweighs it unfortunately. We cannot replace our lead programmer as LOst kept the source code for himself, making it impossible to the coded source material to be updated or used as a base for newer builds.

Additionally, two key staff members, scanline99 and Cerulean Nights (both of whom were chiefly responsible for the many animations, spritework, and overall polish seen in the demo) have resigned from the project to concentrate on independent works and careers. While we wish them the best in their endeavours, what this means to the project is that they will no longer be producing any artwork for it. Without them we are not able to guarantee the same level of quality seen in the alpha. At the moment, with ongoing careers and kids to look after, both myself and Canned Karma don’t anticipate that we’ll have a great deal of time to devote to S2HD either, which means we’re forced to announce that

Sonic 2 HD is officially discontinued.

Sonic 2 HD has a keylogger. In case you don’t know what this means – whatever you type may be recorded and sent to a remote host, and yes, that includes your bank account details or any password you may type – so it is recommended you delete it immediately.

The software was flagged by anti-virus softwares and the development team also confirmed it and released a public service announcement.

Earlier today, I was contacted by a professional antivirus employee who was interested in why Sonic 2 HD consistently popped up as a threat by multiple antivirus software programs and did some investigation. His results showed that a keylogger is part of the Sonic 2 HD software. After receiving this notification, we conducted our own independent tests and found that there is indeed a keylogging program as part of the Sonic 2 HD alpha software.

I want to emphasize that at this time, we have found no evidence that the software has been “phoning home” any data-only that we have found the capability exists.

Because this vulnerability has been found, we are strongly advising that the software be removed. You will need to delete the files included with the Sonic 2 HD zip, as well as the registry keys hooked at HKEY_CURRENT_USER/Software/NakaSMK (if you are unfamiliar on how to do this, go to Start->Run.., type regedit, follow the folder path, and then delete the NakaSMK folder.)

We will have more information on the situation as it evolves.

This is completely unprofessional and whoever is responsible should own up immediately. It cannot miraculously be in the program without any outside help. Please uninstall the program in case you have downloaded it on your PC.

Via Kotaku.