The recent round of layoffs at Sony Santa Monica apparently was caused by the cancellation of a new IP in the works at the studio, as confirmed by the project's Lead Level Designer Jonathan Hawkins (that also mentioned that the dropped project was the one led by God of War III Director Stig Asmussen), and today we got some insider info on what it entailed from former NeoGAF user Shinobi602 that is known to have very solid contacts across the industry.

Sad to hear Santa Monica's new IP is canned. It sounded pretty darn good from what I was told. RIP, we hardly knew ye.

New IP was really unique, sci-fi...legitimately saddened at the news. Sorry to everyone involved, damn.

What's worse is that it was set to be unveiled at E3. Something massive must have happened. : (

Shinobi also mentioned that he was told that the project was going "swimmingly" and that it "supposedly" was the project involving Battlestar Galactica's writer Michael Angeli. He also explained that (predictably) the assets for the game are being preserved, so we might very well see something made out of them some time in the future.

This doesn't mean that Sony Santa Monica's has now no new IP in the works, as it apparently had three projects undergoing development: one by the God of War: Ascension Team, one led by Cory Barlog (that according to Shinobi still seems to be going on) and the canceled one one with Stig Asmussen at the helm, and we know very little to nothing at all about them. Shinobi Mentioned that he's sure that a new God of War is in development, but that sounds more like personal (even if most probable) speculation.

Interestingly enough another insider, Pete "FamousMortimer" Dodd, mentioned that his sources had a different opinion of the game, also explaining that the decision was taken directly by the studio's director Shannon Studstill:

Teams have to hit development goals. They also, for better or worse, go through extensive playtesting.

No one that's seen it thinks it's a shame that the game was canceled. That sounds like a given. The surprise is that most of the team was fired.

Mind you, it's not too surprising that different sources may have different opinions about a game, and developers directly working on a project often see it differently from people that have a less direct involvement with it, as Shinobi mentioned.

Could be dev bias but like I said they were hitting milestones well, shaping up well from what I was told.

Ultimately, whether the new IP was great or not, it's always extremely saddening to see projects canceled, and even more so when talented developers lose their jobs out of the deal. We can only hope that as many as them as possible will fall on their feet and  find another mean to express their talent soon.