NCsoft is shutting down Paragon Studios, and with that all development on City of Heroes will cease. From their blog: "In a realignment of company focus and publishing support, NCsoft has made the decision to close Paragon Studios. Effective immediately, all development on City of Heroes will cease and we will begin preparations to sunset the world's first, and best, Super Hero MMORPG before the end of the year. As part of this, all recurring subscription billing and Paragon Market purchasing will be discontinued effective immediately. We will have more information regarding a detailed timeline for the cessation of services and what you can expect in game in the coming weeks."
City of Heroes was originally developed by Cryptic Studios, and later purchased by NCsoft, which formed Paragon Studios to continue developing the game. City of Heroes transitioned from a subscription model to free-to-play last year, but apparently NCsoft has decided that it's not the best use of their resources anymore. Sources say that some 80 employees will be affected by the studio closure.