Shame, left with cut up resources and forced to change to systems with different developing programs. Causing an inevitably delay. I feel bad for them, getting no credit for their hard work, while Nintendo when on grabbing all of it for stuff they did not know how to do at first, and using their codes, and washing them off to the side with whatever incomplete package they had.
The end came when we pitched to do a 3D platform game, the likes of which had never been done before. We mocked up a prototype using Yoshi. It was essentially the world's first 3D platform game and was obviously a big risk - Nintendo had never let an outside company use their characters before, and weren't about to, either. This is the moment the deal fell apart. We later made that game into Croc: Legend of the Gobbos for the PlayStation, Saturn and PC, which became our biggest ever game in terms of sales and also in royalties, since we owned the IP.
Cancelling Starfox 64 and using the code that was already done for 64. Making mario 64 based off another design that was stolen after pretty much spitting on poor Argonaut. This is like a reverse Valve, because Valve didn't go taking stuff and spitting on people for games like L4D and Counter Strike.
"Miyamoto-san went on to make Mario 64, which had the look and feel of our Yoshi game - but with the Mario character, of course - and beat Croc to market by around a year," San says. "Miyamoto-san came up to me at a show afterwards and apologised for not doing the Yoshi game with us and thanked us for the idea to do a 3D platform game. He also said that we would make enough royalties from our existing deal to make up for it. That felt hollow to me, as I'm of the opinion that Nintendo ended our agreement without fully realising it. They canned Star Fox 2 even though it was finished and used much of our code in Star Fox 64 without paying us a penny.
I am slightly happy that their later attempt of spitting and stealing unethically failed with the Virtual Boy. They already get credit for stuff they never did already. And Nintendo made sure to engrave it on people heads. I hope more stuff like this pops up. Nes history is already questionable at best, SNES 3d history has been revealed, and now N64. . . . . . . . http://www.eurogamer.net/articles/2013-07-04-born-slippy-the-making-of-star-fox
They also poached some of our best programmers - Dylan, Giles and Krister - which was inevitable since they had lived in Japan for so long that they weren't going to come home anytime soon. We had taught them 3D games and left them a permanent legacy of being able to make such games. I'm not bitter, but I do feel that Argonaut was used and then spat out by Nintendo. I also feel they undervalued us; we could have done so much more. We had built a Virtual Reality gaming system for them called Super Visor that would've been awesome, but instead they canned our project - which was full colour, had head tracking and 3D texture mapping - and released the ill-fated Virtual Boy in its place.