To me this really doesn't sound as dramatic as a lot of people in here are making it out to be. Sounds more like the vertical slice was never supposed to be more than a prototype and the production on the actual game was always supposed to only start now.
I still feel like, even if they're not starting over, that everything about this title looks rough, and that the reason DmC was their best title because Itsuno and Capcom cracked the whip a lot.
No shit, Sherlock. Every game looks rough this early on in the development process. Games don't just plop out bug-free and polished, you know. The difference with Hellblade is that they're showing it much earlier than most developers would usually show their games.
They probably showed the game early to generate a buzz and maybe get more resources for production but that was way too early.
You never show a game in concept-phase because it's the 'We-can-do-anything-and-its-awesome' stage. Once you start building your vertical-slice to test out your gameplay loops, a lot of the issues arise and you start to see what the whole game experience will be like and it's make or break sometimes.
They probably picked the best decision, even if it's the hardest (on morale and pride).
Remember kids, don't show your game too early.
The decision to show the game this early was a very deliberate one on their part because they want to be more transparent and create more awareness of and interest in how games are actually made. They've talked about it in length before.
It's really annoying to see all these misconceptions about Hellblade in every single thread about the game. And no matter how often someone corrects them and explains what's going on, they just keep coming back every single time. (Maybe not from the same people but it's still amazingly frustrating.)