Project Milo canceled...again?

Source: UK gaming news site Eurogamer.

What we heard: Microsoft's camera-based motion-sensing add-on Kinect will be in stores on November 4, but it seems like only yesterday that Lionhead Studios trotted out its little boy simulator Project Milo to debut the device at the 2009 Electronic Entertainment Expo. Since then, the status of the title has been unclear, with Microsoft saying within the course of 24 hours in June that it did not, but then again did, have plans to bring Project Milo to market.

It's now possible that Microsoft has once again pulled the plug on Project Milo. Eurogamer reports today that Project Milo has been officially canceled, with Lionhead showing the door to 19 contractors who were working on the project. Unfortunately, Eurogamer's information comes from the most tenuous of places, as the UK gaming site cites "a source claiming to be close to the situation" as the provenance of its information.

While bad for Xbox 360 gamers looking forward to seeing what Milo had to offer, the reported development is apparently good for Fable fans. According to Eurogamer's source, Lionhead has now established two teams to work on the Fable franchise. Further, the team that was working on Milo will reportedly implement some of its work into a "Fable-themed Kinect game."

The official story: Microsoft had not responded to requests for comment as of press time.

Bogus or not bogus?:Bogus for now, since Eurogamer's source is questionable at best. Further, Eurogamer itself noted that just last month, Lionhead boss Peter Molyneux told the site that Project Milo was absolutely intended for a retail release, saying, "I wouldn't be working on it if I didn't hope that to be true, yes."