An early-2009 company-wide reorganization at UK developer Rare to better focus on development for Microsoft's Project Natal apparently meant the axing of several "traditional" sequels including Xbox 360 launch title Kameo.
The restructuring of Rare may have taken place all the way back in February of this year, but other than generic corporate buzzspeak about improving efficiency and a focus on quality, the true reasons for the change - and the casualties thereof - were largely unknown.
However, a source close to CVG has apparently shed some light on the matter: The purpose behind the Rare reorganization was to focus development on software for the upcoming launch of Microsoft's Project Natal, at the cost of "more than one 'traditional' franchise sequel." The only game mentioned by name as being officially canceled in the restructuring is Kameo 2, the sequel to Xbox 360 launch title Kameo.
Of course, given that another reason for axing Kameo 2 was the poor sales of the original, I find it hard to believe that there are all that many people out there who are completely broken up over the announcement. Sure, the game might have gotten decently favorable reviews, but it didn't exactly set spark a revolution.
The source does specifically say "more than one" franchise sequel, though, which leads me to wonder what else got cut in the mix. Banjo-Kazooie? Blast Corps? Perfect Dark? Sadly, we'll probably never know. Oh well.