According to reports from CVG, Kameo 2 was in development at Rare, but has since been canned due to the firms involvement with Project Natal.

Early in the year Rare underwent a company restructure to work on games for Natal, which has forced them to put past projects aside. Kameo was a launch title for the Xbox 360 in 2005, but was met with disappointing sales – another factor for the cancellation.

It seems that a second traditional sequel was also in the works at Rare, but this was cancelled too. We think it could have been a new Killer Instinct or Perfect Dark game, but we can't be certain.

We've contacted Rare for comment, stay tuned.