Development on Lionhead's ambitious Kinect title Project Milo (aka Milo & Kate) has been cancelled, sources close to the project have told GamesIndustry.biz sister site Eurogamer.
The rumour has it that the plug was pulled on the child-interaction game yesterday, leading to the loss of 19 contractors.
Reportedly, the title's tech will be pooled into a future Fable title.
This is not the first assertion that Milo & Kate would not make it to market, with Microsoft's Aaron Greenberg claiming it was merely a tech demo this June.
Lionhead boss Peter Molyneux has repeatedly denied such claims in the past. However, neither he or Microsoft have commented on the current allegation as yet.