[UPDATE] Following the publication of this story, Greenberg recanted his comments via Twitter.
"Project Milo absolutely continues in development at Lionhead Studios, it is just not a product we plan to bring to market this holiday," he said. "The team at Lionhead Studios has always been a center of innovation and will continue to deliver against that charter." The original story is below.
One of the highlights of Microsoft's press briefing at the 2009 Electronic Entertainment Expo was Milo, an interactive virtual boy that sensed players' emotions. In a video presentation (see below), the Project Natal title was unveiled with great fanfare by Peter Molyneux, head of Lionhead Studios, where it was developed.
At E3 2010, Milo was most notable by his conspicuous absence from Microsoft's press event, which came after a Cirque du Soleil performance at which Natal was renamed Kinect. Now, Xbox 360 director of product management Aaron Greenberg has revealed the reasons for that absence--namely, that Milo will never see the light of day at retail.
Greenberg told the Australian Broadcasting Corporation's Good Game show that Milo was a tech demo, and nothing more.
"Milo he's safe and sound, back in England," he said. "No, he's uh...the Milo Project is something that Lionhead Studios and their labs had developed. You know, when we unveiled the project Natal technology we showed a bunch of technology demos as part of that, and obviously that's a tech demo of technology that still exists, but right now it's not a game that we're planning to bring to market."
Kinect, the controller-free motion-sensing system that Milo helped showcase, launches in North America on November 4. Microsoft has confirmed that the camera-based system--which also offers video chat and Minority Report-like gesture control of the Xbox Live dashboard--will cost $150.