Many have been wondering why Microsoft didn’t show anything from Rare at E3. Our sources tell us that the actual reason we didn’t see any announcements for a new Viva Piñata or Banjo Kazooie is that the Microsoft-owned studio has, in fact, been hard at work developing for Project Natal.

From what we hear the studio is attacking Natal on a variety of fronts at several different angles. While we don’t know exactly what they are working on, they are doing a lot of different things beyond just the development of new game titles. The studio most recently was responsible for the avatar system that launched in conjunction with the most recent update.

According to the whispers that we hear, you can expect that Rare will have something when Natal launches. What exactly it will be is still a mystery, but we would guess that we will get more specifics as we get closer to the release of Natal.