Winterkewl Games tells in this lengthy article that it will disband. Winterkewl was the developer behind the Yogscast-backed Kickstarter project Yogventures, which raised over a half a million dollars from over 13,000 backers. Last week Yogscast announced that the game had been effectively canceled but promised to give backers a copy of a similar game being developed by Nerd Kingdom called TUG, an open-world sandbox which it is now partnering with instead.
The studio chose to abandon the project after it became clear that the game's slow development progress and its limited resources created an unsustainable situation, according to Eurogamer's report.
The studio said in an earlier post this week via the Kickstarter page that it turned over the remains of the Kickstarter funds - $150,000 - to Yogscast, but what happened with that money remains a mystery.
The only public response from Yogscast disputes some of what Winterkewl has said publicly about how it spent the money and its relationship (described by Winterkewl as tense).
You can read Eurogamer's report here.