Pictured here we see the "Project Milo Team" hard at work, according to a TweetPhoto posted by Lionhead Studios' Sam Van Tilburgh today. Van Tilburgh's proof comes in response to comments made by Aaron Greenberg about the status of Lionhead's Milo & Kate project in a video clip (see 0:41 mark) posted on the Australia-based ABC "Good Game" site. "Obviously, that's a tech demo -- and technology -- that continues to exist, but right now it's not a game that we're planning to bring to market," Greenberg said of Milo in the brief clip.

While Van Tilburgh could not openly comment to Joystiq on the assumption (based on Greenberg's statement) that Milo could remain a non-retail tech demo, he did clarify, "There's about 50 people on the 'Project Milo Team'" (which would seem an unlikely number of staff and apparent resources to devote to a mere demo).

Van Tilburgh deferred to Greenberg, who tweeted this official statement today: "Project Milo absolutely continues in development at Lionhead Studios, it is just not a product we plan to bring to market this holiday." While carefully worded, Greenberg's statement suggests that Milo, in some shape or form, is likely to be integrated into a retail product in the future.

Just last week, Lionhead head Peter Molyneux teased that there was "a very interesting reason" why the updated Milo & Kate demo was not shown to media outlets during E3. Could it be that Molyneux is saving the big reveal for his scheduled TED talk? Probably not -- but the "game changing" designer will be lecturing about his "astonishing virtual friend" on Tuesday, July 13. Hopefully, he'll start to Kinect some of the dots.

This article was originally published on Joystiq.