Rumour suggests that the interactive child simulator Milo and Kate for Microsoft's Kinect has been scrapped.
A Eurogamer source claims that Project Milo, which was intended to be released as a gaming title for the forthcoming Kinect, has been cancelled, and that 19 contractors working on the project have been laid off.
The source said that the remaining team members have been put to work on a new version of the game Fable, which will be developed for the Kinect using Milo’s technology.
Although the game was expected to be one of the first releases for Kinect, while attending the E3 conference Microsoft's Aaron Geenberg had announced that the Project Milo and Kate was merely a tech demo, which the company did not intend to release to the market.
Commenting on the issue, a spokesperson for Microsoft said: "Microsoft does not comment on rumour or speculation."
Lionhead chief Peter Molyneux is yet to comment on the issue, having previously said that he wouldn't be working on the project if he didn't hope that it would be made available for purchase.