Final Fantasy Versus XIII was originally conceived as one of the 3 games that would make up the Fabula Nova Crystallis, alongside Final Fantasy XIII and Final Fantasy Agito XIII. XIII would be for the PS3 and Xbox 360, Versus would be PS3 exclusive, and Agito would be a mobile phone game. As time passed, Agito was converted to a PSP game and gained the new title of Final Fantasy Type-0, losing the XIII moniker, although still part of the Fabula Nova Crystallis. Type-0 has yet to see a release outside of Japan since last year, although Square Enix claims it is working on translating the game, despite the PSP being mostly dead.
Quite some time ago, gameplay footage of Versus was finally displayed, showcasing a combat system similar to the Kingdom Hearts series, just as director Tetsuya Nomura had promised. In reality, this was actually pre-rendered footage made to look like gameplay footage since the game had to change engines due to Crystal Tools being such a high performance engine.
Then again, this is Kotaku that is reporting this.
Update: Disregard that, Kotaku lied AGAIN. Square Enix is reporting that the game is not cancelled and very much still in development.
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