While the thread on this rumor is pretty thin, we wanted to share it with you anyways, being clear about its origins. After yesterday's rumor-splosion gave us some more potentially accurate info on Lips – the Xbox 360's answer to PS3's SingStar – we received an unverified tip which appeared to originate from within Microsoft, which told us that the Microsoft Game Studios-published title was being developed by iNiS, the Japanese dev best known for its Elite Beat Agents and Ouendan Nintendo DS games.
So, to recap: Microsoft is working on a karaoke game codenamed "Lips" – that's a rumor. The developer working on the game is iNiS – also a rumor. That iNiS has a long history of making music and rhythm games and that it's co-founder Keiichi Yano confirmed that the developer was in fact working on an unnamed Xbox 360 game – those are both facts. We'll (hopefully) put the rest of the puzzle together four weeks from today when Microsoft holds their E3 press conference. If you've got any more information, we're all ears about Lips.