Microsoft currently has no plans to release Milo & Kate after all, Peter Molyneux has reportedly told the TED Global conference in Oxford.

A fortnight ago Microsoft mouthpiece Aaron Greenberg said "right now it's not a game" before changing his mind, after which Lionhead boss Molyneux waded in and said Greenberg's original comment was based on out-of-date information.

According to the BBC report on Molyneux's speech at the TED Global conference in Oxford - where technology gurus are given 18 minutes to present their ideas - the veteran games designer said the Milo technology is in development and Microsoft has no plans to release it.

However, he also hinted that the game was designed for widespread use and could end up being a commercial product one day.

We've contacted Molyneux's spokesperson for comment.

Molyneux also walked attendees through an updated demo of the technology, which was first shown at E3 2009 during the unveiling of Kinect - then known as Project Natal.

One particularly interesting detail was that Milo's mind "is based in the cloud", meaning that his artificial intelligence improves as people around the world play with him and that development is fed back to the whole over the internet. "As millions of people use it, Milo will get smarter," Molyneux said. Careful, Peter.

Describing Milo as "a new revolution in storytelling", Molyneux said that "films, TV, even hallowed books, are just rubbish because they don't involve me". "It's a sea of blandness," he said.

The audience was told that Milo is a kid who has just moved from London to New England and has lots of time to himself. In the demo, Molyneux's assistant helped Milo explore a garden, skim stones and share secrets.

Molyneux said "no two people's Milos can be the same" because of the degree to which the player's actions sculpt his personality. "Some of the things you are doing will change the course of his life," he said, noting that after 45 minutes Milo recognises you.

The software allows Lionhead "complete control" over facial animation - right down to blushing and nostril width - to help convey stress and emotion. Apparently it's partly thanks to technology found "hidden in the dusty vaults of Microsoft". Top men.

"Most of it is just a trick - but it is a trick that actually works," Molyneux said. "I can promise you that if you are sitting in front of this screen, that is a truly wonderful moment."

That was more or less it, but he did add that the section being shown was early in the game, and that later on things got a bit more exotic. "There are lots of adventures - some of which are quite dark," Molyneux, whose other games include Fable III, explained.

For more on Milo & Kate, check out the original presentation from E3 2009 below, and read Ellie Gibson's account of an evening interacting with Milo.

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Tom Bramwell

Tom Bramwell

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