According to the Cnet game center, Papyrus has been split.
http://www.racesimcentral.net/
Rick Genter and others have left for the new team, 5d Games
At first, I was e***d, thinking "Finally, maybe we can get a chance
for someone with Papyrus' talents to make something other than
Indy/Nascar!" - Unfortunately it turns out that they will NOT be doing
racing games.
What's worse is that they left *because* Sierra apparently has been
very inflexible with them, which suggests that Sierra has no interest
in developing a non Indy/Nascar game.
I don't mean to be sounding too many alarms - please don't flame! -
but it seems that Papyrus may end up becoming creatively stifled.
I hope another company will be willing to pick up the ball if that
turns out to be true.
Two items of advice to whomever that may be -
1 - There's all kinds of racing beyond mere Indy/Nascar
2 - True physics is what gives the game it's feel,
and the feel is what makes it fun.