Lionhead Studio's "game" that was probably just really always a tech demo anyhow, Project Milo, has been shelved, according to a source speaking with Eurogamer.
Word is that the project was shut down earlier this week, with 19 contractors hired to work on the project laid off. In its place, it's said that technology from Milo will be used in the development of a "Fable-themed Kinect game."
The history of "what's up with Milo?" has been a sketchy one. Lionhead's Peter Molyneux demoed the game during the initial reveal period of Microsoft's motion control tech. After some silence, Microsoft's Aaron Greenberg seemingly confirmed it was a tech demo, later to be contradicted by the publisher who itself who claimed it was a product slated for a holiday release.
What's the stance now? "Microsoft does not comment on rumor or speculation."
Rumor: Project Milo cancelled? [Eurogamer]