Has this game been abandoned outside of new content? I see there are 3 new games being developed by Arrowhead, but there are still some major bugs in Magicka to be worked out regarding online play (game stability, lag issues, etc.) The small studio excuse is no longer valid. Magicka has made Arrowhead plenty of money.
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Arrowhead are working on new content from what I've heard... If there do bring new content they will no doubt bring a bunch of bug fixes too. The netcode has been optimised quite a bit since the game was released, and lag is often caused just by poor p2p connection... I don't think there's a simple easy fix to the netcode and it needs to be redesigned... but no doubt Arrowhead will have learned from their mistake 
Lag is caused by poor connections, yes, but lag is not an excuse for games "desyncing" (for lack of knowledge of what to call it) and the dead body of the host floating across the screen and launching spells from a random point on the map. Or, pinging a bad connection and sticking you in the loading screen for 20 minutes before it finally times out and starts the game.
Actually that sounds entirely like bad connection to me. I suffer it from time to time when my router is being a derp.
I think your mistaken Piker, a bit. It's one new game. Arrowhead are behind developing "The Showdown Effect", together with Pixeldiet Entertainment. Correct.
However.
Dungeonland is from Brazil-based newcomer Critical Studio.
Red Frontier is developed by Zeal Game Studio, in Sweden.
But all three are published by Paradox Interactive, yes.
That said. I agree the net code could be better. If it's possible using this XNA-stuff I don't know. But I guess it could be. This "desync" should be possible to get around somehow. If it's not possible to minimise the bitrate, the drastic way would be "halting all", wait until server and clients are up to date, then release. I'm not sure that's the correct way to do this for magicka, but I've seen games made that way.
They are working on the "Other side of the coin", so Magicka is being developed. And with most of sever game bugs now gone, my guess is that focus for "fixing" is the co-op part. If they are able to make "join on the fly" possible, that would be a great step forward. Not sure it can be done, but then you would at least be able to join in again if you get thrown out of a game.
All this GDC stuff have probably taken up a lot of time, but now their back home again. So lets hope for some good news quite soon.
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