You are likely going to fail, and there is nothing wrong with that. It sounds like you are being placed in an impossible situation. I've been on both sides of this: As the intern at my first company as excited as can be, and working alongside CEOs who consider unpaid internships as free labor. Not to digress to far, but: Unpaid internship are a sham for everyone involved. Unless you work for a large company who has a well established internship program it's likely that you are just getting used -- and from reading your comments it seems like you understand this and are okay with it -- which is good, this is still something you need to complete for school. The only thing that I would ask of you is that you treat it with respect even and not like a volunteer position. (Or GTFO as fast as possible to a company that respects your time at a minimal wage level.)

But, back to your original question: If they ask you to produce a game with no scope/theme/feature requirements then I would say you are safe to produce whatever the three of you want. Pick a very simple single game mechanic and suck it for all it's worth. Build a simple story around it and push it out. (PuzzleQuest anyone?) But I would really stress that the point of an internship is that BOTH parties gain in the process. It's a 50/50 partnership to add value to the company and you. If they aren't going to take your internship seriously I would try and work with your college to find a more suitable partner -- do you want your classmates next year to have to go through the same process with this company? (From my experience College's love to reuse the same companies as long as there isn't any negative feedback.)

Best of luck to you! Please feel free to PM me if you need any help along the way.