The game was first revealed in 2011, under the name Ruin. Sony touted the benefits of cross-play in its E3 presentation that year, making the game one of the focal points of their cross-play strategy.
However, the original developer, Idol Minds, was rumored to have been shut down early in 2012. Sony San Diego was expected to take over development, but the game did not make an appearance at E3 2012, sparking the rumors of its demise. Those rumors have been confirmed today.
You can see what Warrior’s Lair could have been in the below video.