Xbox technology to project graphics around room will be shelved.
Microsoft has admitted its ambitious project to expand graphics beyond the screen and across a room are too expensive to commercialise.
Its Illumiroom scheme uses a Kinect camera and a projector to extend graphics onto the walls and ceiling of a room, to provide a more immersive gaming experience.
But the AusGamers website quoted Albert Penello, head of product planning for Xbox One, as saying it was too costly to make the technology widely available.
He told the site: "It’s super-neat if you’re in the lab and you’ve got Microsoft money.
"We looked at it, but for an average customer it’s like thousands of dollars [to set up]."
Microsoft demonstrated the project at this year’s CES technology show, and developers told crowds it would change the appearance of the room, and enable entirely new gaming experiences.
Since the January show Microsoft has kept quiet about the project, despite speculation that it could become an add-on for the new Xbox.