"Sorry, no M&K reboot," Microsoft Studios executive Phil Spencer said on Twitter. "Idea was compelling and we learned a lot creatively, but we struggled to get a full game out of it."
Announced during the 2009 Electronic Entertainment Expo, Project Milo was created by Fable developer Lionhead Studios for the Xbox 360 using the original version of Kinect, which was known at the time as Project Natal.
In the demonstration video (below), we see that the in-game character Milo could respond to human interaction and even detect the nuanced levels of emotion in your voice. Such technology could conceivably have interesting implications for role-playing games--among others--but Microsoft has yet to resurrect the project publicly.
"This is true technology that science fiction has not even written about," former Lionhead Studios boss Peter Molyneux said at the time.