It's really just so much simpler than people, even the PM devs, are making it out to be.
They looked down the road they were going, realized things were getting into way too much of a legal gray area, and got out before they dug a hole so deep that they couldn't escape from it. There was no C&D, but they wanted to stop before they got the risk of something WORSE than a C&D.
It's as simple as that.
Pretty much. Everyone, even some of the dev team, is putting so much emphasis on the "creative ethics" of playing, distributing, and further developing the leaked build or any other unofficial derivative releases, about how it upsets the developers that their unfinished work is being put out in the open for all to see. While I get how the developers would feel there, but also ignoring the debatable nature and general confusion of some of the front page article on certain fronts, that is missing the biggest issue here, and that is that people's lives are at risk (not in the sense that people will die, but in the sense that they will effectively have their lives ruined indefinitely) if people continue to work on the game or over expose it in general. The front page article here did briefly mention the "legal fear" that caused the shut down of the project, but it was so briefly mentioned and tucked in there that people just mostly ignored it and ended up confused about everything else.
Mewtwo2000's Facebook post cleared up way more than any of the other statements we've seen. Not just his post, but he's been responding to people in the comments of it. Really, they should be taking what he says and using that as their "official statement" on why the project is being dropped and why they don't want to see unofficial derivatives. Not only did his post properly explain the legal fear they have in detail, but it covered the other stuff too, in more cohesive detail anyway.
The way I see it, they are trying to post all of these PR statements, but most of the team doesn't seem like they have the talent to properly form one (that's not an insult, it's just the impression I get - developers are often not the best at PR anyway). Mewtwo2000, though, seems like he gets that job done the best, though, so they should just take his statements, spread them around, and let that be the final word. It's already proven to have gotten the best response from the people in the community out of all the statements they made.
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Anyway, did you guys see the new Linkle trailer? The music is this wonderfully whimsical remix of the LoZ main theme.