It's been a long time since we last heard anything about Massive Entertainment's game based on James Cameron's Avatar, meaning it would've been easy to assume it had been quietly canned. Except, according to a Massive producer, The Division developer is still hard at work on it… it's just not ready to say anything else at the moment. In an interview with Screenrant, Jesper Karabanov confirmed that the game was still in development, but that he can't say anything else about it yet.
Under the working title The Avatar Project, it was initially announced back in 2017. Massive is internally split, with different teams working on The Division and on The Avatar Project independently. Since 2018, the Avatar team has been in its own office building which will serve as its home until the entire Massive studio moves into the new Eden building in April of this year. The studio has also been hiring for positions on the Avatar team, including an AI programmer, an animator, and an associate producer.
Guessing when The Avatar Project will come out is difficult. Avatar 2, the movie, isn't due out until December 2021, and then we're meant to be deluged with Avatar 3, 4 and 5 in the years after.

However, Ubisoft also has a very busy schedule before Avatar 2's launch, with Watch Dogs Legion, Gods & Monsters, Rainbow Six Quarantine, The Settlers and Roller Champions all due some time before then. And that's ignoring games with vaguer release dates, like Skull & Bones, Beyond Good and Evil 2 and the rumoured Norse-themed Assassin's Creed.
Is there a chance that this game will instead aim to release closer to Avatar 3's release in 2023? Right now, the last Avatar film was 12 years ago and doesn't have much of a grip on pop culture any more. It isn't a very lucrative series to adapt, so maybe waiting for the sequel to bring it back into public consciousness before releasing it would be the sensible thing to do?
Regardless, Karabanov's comments suggest we're a very long way away from hearing any more about The Avatar Project.