Development was notoriously tumultuous, largely due to toxic management "politics". Ultimately, LEGO decided to rescind the licensing rights from Mindscape after LEGO Island and Mindscape fired the entire team the day before release to dodge paying bonuses that were promised based on the game's success. A planned sequel/spinoff entitled "Beneath the Phanta-Sea" based on the same engine developed for LEGO Island was cancelled.

LEGO Island Wiki: Mindscape