The fate of Kinect poster-boy Milo has been in question ever since Lionhead debuted the technology at E3 2009. Was this a simple tech demo or could it be more?

Two years on and it looks like Milo was a thing of the past; all grown up now and having more important problems like girls and zits. However we can still see a few glimpses of what might have happened had the little scamp reached the 360. A short video has been released (below), taking a look at the project. Drama director John Dower is here  to explain a bit more about how the game works both in terms of connecting with Milo and gameplay itself. There’s a look at the making of the game, with those funny mo-cap suits, as well as a load of footage.

That Peter Molyneux, he’s a crafty one. After showing off Milo at E3 2009, we were later told it was a “tech demo” instead of an actual game, a statement quickly amended to mean it won’t be out this holiday season. Suddenly, months later, Milo is a “world changing” game which gets canceled and assimilated into the Fable series. Now Molyneux is demoing the maybe-cancelled-but-not-really-tech-demo-game-thing to Gears of War developer Epic Games.

Using his Twitter account, Gears executive producer Rod Fergusson let the world know that Molyneux was paying them a visit, saying that the company occasionally has guest speakers come in and give lectures and they were “fortunate enough to have Peter Molyneux for the latest one.” Shortly after the speech was concluded, Fergusson followed up with another tweet, this time specifically talking about the Milo demonstration and admitting that he would “definitely play it.”

Still nothing firm on whether the childhood sim is going to be released, but if Epic Games likes it, it can’t be all bad. Can it?

Development on once Project Natal showpiece Milo, since said to be a project that would one day see retail release, has stopped, sources have whispered to Kotaku and Eurogamer, also departing with another interesting bit of info: the tech behind the boy wonder will be used for another project, one based on Lionhead’s Fable franchise.

The studio was going to include Kinect functionality in the upcoming Fable III — the studio would be “crazy” not to do so, Molyneux once said — but scrapped those plans due to the bits of the game that would use the tech not being up to scratch. Post-launch Kinect functionality hasn’t been ruled out, however.

When reached for comment, Microsoft said: “We have no news to share on the Milo front and do not comment on speculation or rumor.”

Last month, legendary game designer Peter Molyneux spoke at a TED gathering and showed off a brand spankin’ new tech demo for the creepy/awesome “Project Milo.”

Until now, TED (not a dude, but rather Technology Entertainment Design) kept the footage hidden from the general public. Now that footage is in the wild on YouTube, and ready for your eyes and ears.

Check out the clip below, and let us know what you think. Totally creepy? Crazy enough to work? Compelling? A fail waiting to happen? It’s gotta be one of those.

As the comments on what Project Milo is or isn’t were being thrown around earlier this week, Microsoft Game Studios VP Phil Spencer threw in words which indicated that Frontier Developments’ Kinect launch title Kinectimals and the Lionhead virtual boy were sharing tech.

Simply not so, Frontier chairman David Braben has today clarified.

In an email shot to OXM, Braben wrote: “I’d like to address some stories that are currently circulating, that Kinectimals from Frontier is somehow related to Milo and Kate from Lionhead.”

“Kinectimals has been in development since before we saw Milo. It is built using Frontier’s own technology shared with other Frontier games in development, and ideas evolved from earlier games like Dog’s Life.”

“There has not been any involvement in the technology or design by Lionhead. Milo and Kate is a completely separate (and intriguing) development from Lionhead.”

That’s cleared up then.

There’s been some confusion over the nature of Project Milo, Fable developer Lionhead’s Kinect-only what-the-bloody-hell-is-it project, in the last day or two. Microsoft man Aaron Greenberg has called it a tech demo only to backtrack later; it “absolutely continues in development at Lionhead Studios.”

Lionhead head and Project Milo lead man Peter Molyneux has now made it extra clear that the boy in a telly is indeed “a full product,” and, in true Molyeneux fashion, possibly “something that can change the world.”

“Milo has been a really hard thing to do and a really hard thing to describe. I have real sympathy for the [Microsoft] people over in Redmond, because they understandably have some questions,” the designer said at the GameHorizon conference in Gateshead, England.

“The biggest challenge for us is convincing people what we’re doing is actually going to work, is going to reach a new audience, is going to be an idea that people love. That for me is a massive challenge. Convincing people what you’re doing is something that can change the world.”

He added: “This is a full product that we’re working on. It’s not going to be released this year for sure, it’s not part of the launch line-up – I think it would be inappropriate to be so, it’s using Kinect in a very different way which is very sensitive” — exactly what that means should be revealed in two weeks’ time at Molyneux’s TED talk, where Project Milo is going to be “somewhat premiered”.

Update: Greenberg has clarified: “Project Milo absolutely continues in development at Lionhead Studios, it is just not a product we plan to bring to market this holiday.”

Original story: At Microsoft’s E3 2009 press briefing, the company showed off a rather creepy motion and vocal recognition demonstration between a woman and a boy named Milo. The demonstration was later named Project Milo, a piece of software in development at Lionhead Studios, makers of Fable games.

As it turns out, what we saw last year was merely a tech demonstration, and according to Microsoft’s Aaron Greenberg, won’t come to market.

Speaking with Australian TV show Good Game, Greenberg explained the situation.

“Last year we unveiled the Project Natal technology, we showed a bunch of technology demos as part of that. And obviously [Milo] is a technology demo that continues to exist, but right now it’s not a game that we’re planning to bring to market.”

We all know Peter Molyneux and his ambitious ambitions. Perhaps Milo is part of a future Fable game where direct interaction with the game’s characters is commonplace. Would that be fun/interesting, or something you’d actually be interested in?

Whatever the case, Molyneux will show off the tech next month at his TedGlobal talk in Oxford, where he’s supposed to gush more details on the tech’s capabilities.

Lionhead’s Milo project, which was strangely MIA from Microsoft’s E3 media briefing this week (for a very interesting but apparently a secret reason), is expected to resurface next month.

That’s according to designer Peter Molyneux himself who during a recent chat said that he’ll be demonstrating the ten-times-more-amazing-than-you’d-expect title during a TEDGlobal talk he’s giving on it in Oxford in July.

Actual details on the title will have to wait until then.

He did touch on what to expect from other Kinect titles though; the man believes that the “real greatness” of what the motion device can offer will come not from its launch line-up, but from the second wave of releases.

“…the experiences that you see at launch, they’re good, they’re robust and they work. But I would encourage you and the whole world not to think of those experiences to define what Kinect is. It just gives you a glimpse of [what] the future can bring.”

He added: “So, I think that those launch titles are great, but the second wave of titles is where the real greatness comes.”

That rules out Milo as a launch title then?

Remember that spooky little virtual child from last year’s E3? Of course you do. Few can burn the memory of Milo from their retinas, and despite not appearing at this year’s event, Microsoft promises that Milo will return to make millions vaguely uncomfortable once more.

Quoth the ever exaggerating Peter Molyneux: “I promise you, it is now ten times more amazing than you’d expect it to be… It’s only when you see it in its entirety and play it that you realize it’s robust enough for people to play on their own.”

Note that not even he can refer to Milo as anything but “it.”

Milo, the character Microsoft demonstrated Project Natal‘s possible uses with at E3 last year, is more than just a tech demo and will be returning in a big, “dramatic story,” Lionhead’s Peter Molyneux says.

“I was very, very tight about what was actually being said about Milo and not being said about Milo. I think it did its job,” the Lionhead boss and MGS Europe creative director said at X10 last week. “It made people look around and say ‘How could you make a game out of a character like Milo?’ And I think that question is still out there; I’m just not allowed to answer it.”

On second thought: “I might hint… Milo is a character in a bigger and more dramatic story that we’re telling.”

Perhaps a second appearance at this year’s E3 then?

The master of the grand statement, Peter Molyneux, has been all over the place at GamesCom today. Fable III announced, Fable II Episodic announced, teaser trailers, pics and talk of revolution – Microsoft’s presser was all about the wares of our favourite baldy Brit.

So, it’s clear Molyneux and his team over at Lionhead have been busy. Too busy for child-worrying sim Milo and Kate? Not a chance. At today’s GamesCom Microsoft presser in Cologne, Molyneux confirmed that Lionhead are indeed still “working hard” at the game. That’s sorted then.

Oh and by the way, the ‘Kate’ of Milo and Kate is Milo’s dog, who didn’t appear in E3 2009′s demo. I missed that first time around. Maybe you did too.

Peter Molyneux, big boss at Lionhead, took the Microsoft E3 briefing stage to reveal what his team have been up to for the past few months. The answer is just a little nuts. Lionhead have been creating something that utilises Microsoft’s new ‘Project Natal‘ motion sensing camera, it’s called Milo.

Throwing to a video filmed at the Lionhead studios, Molyneux introduced ‘Milo’, a young boy on screen. A Lionhead employee, hooked up with a headset and standing in front of the motion camera, showed off the number of ways you can interact with Milo. Thanks to the camera and voice recognition, Milo reacted believably to the words, body movements and even the Lionhead employee’s tone of voice. It is actually incredibly impressive.

Molyneux, who understands that some may question the reality of the filmed demonstration, said ‘Milo’ will be shown behind closed doors at E3 this week. Presumably this is what he’s been itching to tell everyone about recently.

This could be damn big news, people. Expect a whole ton more soon.