I heard that they broke up, with some of the core members staying with Sega and others going to Polyphony Digital, which was the dev house responsible for the notably PD-like PSX shooter Omega Boost. However, I've also heard that this was just a rumor, and that no such thing ever occurred, OB essentially being a PD knockoff. More authoritative sources support the notion that the Team Andromeda members, for the most part, are now working for Smilebit. It also seems that Andromeda members are indeed working on Panzer Dragoon Orta...