The Last Guardian has not been cancelled according to several high ranking Sony employees despite rumours circulated by IGN.
The site originally ran an article entittled 'The Last Guardian Offcially Cancelled' citing "internal sources" at a Sony meeting last week. Their article has since been renamed 'The Last Guardian May be Cancelled' after PlayStation bosses immediately struck down the report.
SCEA's Scott Rhode had this to say, "Shuhei Yoshida and I laughed at this rumour over dinner. The Last Guardian has NOT been cancelled."
Yoshida is president of Sony Worldwide Studios. Naughty Dog's Neil Druckmann also poured cold water on the report stating, "'Internal sources' strike again! I wonder if gaming journalists who actually work hard to confirm reports get offended by stuff like this."
Of course, The Last Guardian is being developed by Sony Japan Studios, not Naughty Dog, but Druckmann is likely aware of on-going projects elsewhere within the Worldwide Studios group.
IGN has updated their article to state the story came from IGN Russia and added, "We're committed to getting the full story and will be updating this piece with more information as it develops."
The Last Guardian has had a troubled development but it seems Sony isn't ready to pull the plug just yet. With E3 around the corner, perhaps new information will finally be revealed but it's probably best not to hold your breath.