The story of why Illfonic’s work on the FPS component of Star Citizen was thrown out is actually hilarious.
Cloud Imperium, Chris Roberts’ company that contracted Illfonic to do the Star Marine module, as it was called, was really closed-off and not communicating with Illfonic on a regular basis. This led Illfonic to just do the work, and by all accounts they were doing a good job. It was the only solid, playable part of Star Citizen.
The problems popped up when CIG tried to integrate Star Marine with the flight module. Roberts had licensed CryEngine to build his game as part of a deal to have CryTek’s demo team do the sizzle reel and first demo for the kickstarter campaign. CryEngine is not built for the scale needed for what Roberts intended Star Citizen to be, and had his coders monkey around with the engine. The main adjustment was changing the scale to allow more space for dogfighting to happen in. Illfonic wasn’t told that the decision had been made to make the FPS integrate seamlessly with the flight portion, so they weren’t aware that the scaling was not the same, and there may have been missed payments as well.
The scaling in Star Citizen today is equivalent to a human character being 0.1 mm tall. Illfonic had made Star Marine at a 1:1 scale, so it could never integrate into Roberts’ pipe dream of a seamless FPS/Spaceflight SIM/Life substitute/Ponzi scheme correctly, and Roberts threw a fit when he was asked for payment to square Illfonic up before they would do the work to rescale, so the only competent piece of Star Citizen got binned.