Inside reports claim Versus XIII has been melted down into Final Fantasy XV.
Six years following the first announcement of Final Fantasy Versus XIII, rumors have surfaced suggesting that the project has been killed off. Assuming they can be trusted, it seems that Square Enix has been planning to cancel development for some time already.
Square Enix originally announced Final Fantasy Versus XIII with a launch trailer at E3 in May 2006, but little has been heard about the project since apart from a smattering of screenshots and trailers. The game was notably absent from this year's E3 conference as well as last year's Tokyo Game Show, raising doubts as to whether development was still going ahead. Now, "several sources" have told Kotaku that work on the title has ceased, with one report saying that the axe fell a mere few weeks back. A further source claims that a few months ago, the resources that had already gone into the game were "folded" into Final Fantasy XV. While this information was confirmed independently by yet another informant, neither were clear as to whether the merging of projects involved a transfer of code and assets or simply a reshuffling of staff.
Despite the timescale these revelations would suggest, Square Enix has kept the whole scenario very much under wraps, presumably for fear of a hit to stock prices. The situation has reportedly hurt morale at the company, which refuses to give any specific comment on the situation. When asked for details, it simply stated, "We have no information on the status of Final Fantasy Versus XIII, but will be sure to update you as it becomes available."
Update: Square Enix president Yoichi Wada has denied the rumor via Twitter, claiming that he had just been in a meeting with the game's development team, and that the cityscape they presented would "knock you off your feet."