Eurogamer source tells the site that Lionhead's Kinect-powered Project Milo was canceled yesterday, with 19 contractors let go. Surviving staffers on the boy simulator team will allegedly use the tech on a "Fable themed Kinect game."
Lionhead told Joystiq today that it "cannot comment on rumors or speculation." In late June, the studio dismissed prior cancellation rumors by showing a photo of the team hard at work. That didn't happen this time. Studio head Peter Molyneux had mentioned in recent months that Milo had become a "very, very big tech demo." Perhaps it was time to finally focus on a commercial product and bury the boy alive. (Wow, that's terrifying imagery.)