Earlier this year, we heard that despite the many denials, Steven Speilberg action title LMNO (pronounced Elemental) was dead in the water, the budget pulled, the assets locked away. The game was apparently victim of the sluggish economy.

In a recent interview, game designer Jason Rohrer gives that LMNO-is-D.O.A. talk further credence when he let this slip about the title: "On top of that, I did some consulting work, most recently for EA on the Spielberg LMNO project. My understanding is that project's pretty much been canceled now, what with the changing economy, but I'm not sure."

So maybe canceled, maybe not. This guy isn't sure. What we're sure about: if you're a consultant, you probably shouldn't go around blabbering the status of projects you've worked on. But, hey, we're not consultants. We're gourmet chefs. No, really.

Update: EA contacted Kotaku, stating: "The rumor is incorrect. EA remains deeply committed to its collaboration with Steven Spielberg and projects we are developing together. LMNO was a code name for a project in development at EALA. While the project continues to develop at EALA with Steven, we no longer refer to it as LMNO. We have no further details to reveal at this time."

Interview: Jason Rohrer [EDGE via Joystiq]

Just saw your story on the LMNO rumor and wanted to let you know the game is still in development at EALA under the creative leadership of Doug Church and Lou Castle.

The rumor is incorrect.

For those of you not up on your alphabet games, LMNO is said to be an ultra-realistic title that was once described by N’Gai Croal as “North by Northwest meets ET… if ET were female, grown up and hot.”

You don't play as the girl, however. You're an ex-secret agent, and the bond that you forge while on the run with the computer-controlled woman—good, bad, indifferent—determines the nature of her special abilities and the ways in which she'll assist you. Says Spielberg: "The challenge is, can the game have an emotional impact on players while they are actively manipulating the world?" Based on the clever ways in which he and EA are extracting a genuine performance from their digital Eve—complete with eyes that widen, lips that curl and translucent skin that lights up in different colors to express her quicksilver moods—we think Spielberg's got yet another hit on his hands.

Good to know that's still in the works.