The story I got from my brother was long and drawn out, but my understanding is that basically they were running low on capital and fully expected to get an injection from the publisher. Because of an old fight with the publisher (3DR apparently audited them on Max Payne earnings and found they were holding back, so the relationship was already hurt after that) there was some personal aspect to why they chose not to invest.
Plus, I'm sure the general outlook of the economy didn't help and then, to be fair, what credibility did 3DR have left after promising for years? As the other fellow said, even if it looked like they were so close, how could anyone be sure someone wouldn't make a dumb move and decide start over again or whatever.
I don't know all of the details, but I know the 3DR folks were just as shocked that they came this close only to have the rug pulled out. I heard they even shopped this to Valve, id, and other studios begging out of respect for the IP for loans to keep this thing going just long enough to tie it up. But of course everyone else has their money tied up into their own current projects. The money for this sort of thing has been drying up and people aren't willing to toss it to someone with such a poor track record, even if they see the game is nearly done. It's just too risky.
What I saw, and again, this was nearly a year ago, was a LOT of stuff that refers to or directly mimics D3D. There were, for example, levels you played through then you'd get shrunk and play them through going backwards except now you're small and everything is different from that perspective. I heard rumor of a level where Duke gets shrunk and hops in an RC car and drives around for a while, jumping off pool tables and whatnot.
I think they were clearly trying to give the player those recognizable moments, with a few twists here and there. The story, as best I could tell from the few levels I played through, was essentially Duke vs. Aliens again, but it certainly started out differently and went in a few different directions.
The reason you start off playing the Duke 3D "arcade", I gathered, was because there's some slowness after that where you're Duke and you're walking around in your huge Duke mansion (you literally have a Duke throne in one part of this huge building). I don't know how the story progresses from there, but that's how I understood it started off. I think the idea (then, it may have changed) was that Duke has everything at this point, he's a rich super hero in his mega-building in Vegas, and he's beginning to get bored with things when suddenly, and conveniently, a huge alien ship crashes.
Lots could have changed since that time, but from what I've seen of my bro's renders and movies from the game more recently, mostly it all looks like the same stuff I saw a year ago just a little more polished.
If this is a publicity stunt and 3DR really hasn't gone under, then they've got the employees convinced it's real too. My bro has submitted resumes and setup a portfolio site. He's making calls. He clearly believes he's out of work right now. So while I'd love for it to be a huge stunt, I think it's a little late for that.
I don't want to say too much more than what I believe is already out on the net in different pieces. Maybe it doesn't matter at this point, but George could easily figure out who I am and who my brother is and I don't want to bring anything down on his head or hurt that relationship.
My understanding from my bro and stories I've heard is that George is genuinely a great guy who tried to do everything he could to prevent this from happening. Maybe he was part of the problem at one point by being too much of a perfectionist, I don't know, but I get the feeling his love of Duke and this IP was always well intentioned.
My guess is that someone will ultimately get the IP and do something with it. So while 3DR seems dead, I doubt this is the last we've heard of Duke. I just hope someone terrible doesn't buy it and farm it out to some generic studio that doesn't care for the project.
