Sierra, a division of Havas Interactive, filed a lawsuit against Tolkien Enterprises earlier this year after Tolkien Enterprises, a division of the Saul Zaentz Company, claimed that Sierra had lost the rights to the game.
Sierra picked up the rights when it acquired the Yosemite game development company, but in September 1999 Sierra, under new management, fired the entire development team and started developing the massively multi-player online game over again. Whereas the first development team had discussed their plans openly with the player community, the new development team made no public statements.
As of this writing, Xenite.Org has been unable to confirm the report that the game is cancelled. If the report is accurate, then most likely Sierra’s lawsuit has failed and the rights have reverted to Tolkien Enterprises. New Line Cinema may therefore announce a movie-inspired game within the next month or two.