Binary Space Transition

The other day I was showing my friend my latest game idea when he told me something horrible.
A game already existed with an extremely similar concept.
I'm not kidding when I say that I had no idea this other game existed. I merely took an idea I had been thinking about for a few years and finally made a prototype. So now what? I can't release this if people are just gonna say I ripped off this other game, when I had never even heard of it.

The game plays like this:
When you press left shift, you switch between the positive and negative space in a confined area.
Here's a rough webplayer concept demo to better explain it.
Here's the game that my friend showed me

So needless to say, I am quite devastated.
Do you think the two games are too similar?
My game has physics which makes things more interesting, and is also played in first person.
Edit: My game also takes place in 3 dimensions (not really evident in current demo though)

Has this ever happened to anyone else?
Should I have to give up on my game just because someone else also independently thought up a similar idea?

 

I wouldn't worry about it at all.
It's not like you can't come up with new ways to use the swapping mechanics (like the physics that you already have). Also yours is in first person perspective which is a hugely different concept than the other game.
I think you should study the other game and try to learn from it.

 

Happens all the time. If you have a good game and alter it 10% you have another good game. Nothing exists in a vacuum. If you execute your game well no one will care.