The company's website has been replaced by a message in Japanese stating that the studio was dissolved as of June 30, and the website will close on July 31.
The news comes as a surprise after Nintendo recently announced that the next Super Smash Bros. game on Wii U and 3DS would be co-developed by Project Sora and Namco Bandai.
Project Sora was formed in 2009 by Kirby and Super Smash Bros. creator Masahiro Sakurai as a subsidiary of Nintendo and a division of Sakurai's company Sora Ltd. The studio's only game, Kid Icarus: Uprising released earlier this year on Nintendo 3DS.
Masahiro Sakurai is reportedly still overseeing development of the next Super Smash Bros. game as its director.
Nintendo has not issued a statement regarding a reason for the studio closure. It is unknown what effect the closure will have on Sora Ltd.
> Digital Spy reviews Kid Icarus: Uprising
Watch a trailer for Kid Icarus: Uprising below: