Amid heavy speculation, an unnamed source at renowned British-based developer Rare has said that its upcoming title, Banjo-Kazooie, is not being axed by Microsoft.
On a podcast last week, the American magazine EGM raised the possibility of a major cancellation.
"A big Microsoft first-party title that has been in the works for a very long time, that people are very excited for, sounds like it's being cancelled," EGM writer Shane Bettenhausen said, adding there was a very high chance the rumor was true.
Rare, which produced hit titles for Nintendo for years, has come under criticism for lackluster performance since its acquisition by Microsoft. Some of its latest titles, Kameo and Viva Pinata, have not fared well in the sales department.
If true, a move by Microsoft to abort Rare's project would appear to contradict a broader strategy by the company and its competitor, Sony, to gain further entry into the casual gamer market dominated by Nintendo's Wii.