Banjo-Kazooie creator Gregg Mayles has been speaking to MTV Multiplayer on a number of things, including Peter Moore's notorious comments about Rare's place in the industry, the studio's creative direction and of course, the perpetuating rumors of a Killer Instinct sequel.

Despite the fact that these rumors getting squashed, they have continued on and on, because nobody on the Internet ever gets the message. Mayles said that although a KI sequel might happen in the far-flung future, it would need a fresh idea backing it up. In other words, they're not going to release Killer Instinct simply for Killer Instinct's sake. 

"To me, if you’re just doing a game because of IP, that’s not the right thing to do. If someone came up with some revolutionary idea for a new fighting game, yeah, we might think of resurrecting Killer Instinct. But what we’re not gonna do is just say ‘okay, there’s this kind of vocal, fairly small vocal minority of real die-hard fans out there that want to see KI, so therefore, we should be doing KI.’ That’s not how we’d approach it."

I think that Gregg's message is very clear here -- Rare is definitely absolutely working on Killer Instinct: Gaiden and it will be out next week. 

CONFIRMED!