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These business changes are not sudden, they've been planning them for ages. Which is why it makes no sense that they would announce Fangus and then say it has been scrapped all within a week.
Which is why I think that we are either misinterpreting the statements or it is an april fools prank. Note that none of the games news sites have reported anything about OWI canning all game production, which means they have not put out any official press release about it, which means that all we are basing this on is a couple of people's blogs. Hardly a convincing source.
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Of course, I get the impression that Fangus was just a game that was intendended to put their new engine to good use, as well as making more money more their movies in a relatively cheap manner (engine is made, people familiar, less development time, etc).
If it is an April Fools joke, then they've done an excellent job. They've conned two major gaming websites, and had Oddworld employees state on their blogs that they've been fired, and Oddworld is ceasing game development. Not too mention, the news has spread to Oddworld alumni, who I would suspect would not be too happy about being conned by their friends either. I wish I could say that I believe it is a huge April Fools joke, but I really, really, really, doubt it.
As for 'a couple of peoples blogs'. Considering they actually work for the company, I'd say it is fairly accurate. I'd have though that gaming websites, being media, and in it primarily for the money, would be less trustworthy. Ignacio Castano has mentioned that what has been 'marketed' [published by the media] is actually crap.
Alcar...