With the news of Lionhead Studios and Microsoft killing the Milo & Kate project, many have wondered what will become of the Milo technology that drew so many comments in early demos of Kinect. According to sources, Lionhead will not be letting the development go to waste; instead, it will incorporate many of the elements into future Fable offerings and perhaps even in Fable III at some point, maybe though a DLC offering.

According to sources, the Milo & Kate demos were really more technology demos of what could be done with the Kinect device and it was never really considered to be the groundwork for a title until the reception that it received after a number of demos. At that point, it was decided to explore the possibility of making a title out of it.

The strange thing is that despite the word now that Milo & Kate wasn’t a product, we seem to think that we heard that it was a product that we would see in the future, but not during the initial Kinect launch during the 2010 holiday season. We are not sure who from Microsoft was pitching this at the time. Could it have been Peter Molyneux or maybe Aaron Greenberg?

What part of the technology will be used for future Fable titles? We don’t really know, but at this point to we have to chalk it up to a grand experiment that could yield something, beyond many suggesting that the entire concept doesn’t make much sense at this point. It could really be something in the future, but what that is we just don’t know.