Thanks to IGN, we are happy, and not of the news but of the content, to tell you that Bioware and LA are, of course, working together, but, according to a LA rep, “it has nothing to do with Knights of the Old Republic.”
What does this mean for Kotor III? Well, it means that Bioware is not making Kotor III, and the project LA and Bioware is working on is not Kotor 3 or a Kotor MMO. Our guess is Kotor III will be made, but by Obsidian or another developer that’s well-known with RPGs.
So, what is the project LA & Bioware working are on? Your guess is as good as ours, but it seems to be a MMO. Maybe even to go along with the Live-Action series. We will keep you up-to-date with all this.
Source: IGN.com

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February 15th, 2008 at 2:25 am
*bangs head against keyboard*
This is all so confusing. Why can’t there just be an official statement about things?!?!? Every time there’s a rumour that’s debunked, I lose a little hope.
I’m starting to think Kotor 3 will never come out.
February 15th, 2008 at 10:06 am
It doesn’t seem to indicate clearly that Bioware is working on the MMO Lucasarts will do in the future. We will have to way and see then.
February 15th, 2008 at 2:40 pm
Sadly, it doesn’t. However, it finally clears up the confusion that what LA & Bioware are working on a Kotor game, which they aren’t.. And considering that “there’s a new MMO on the way, and that both EA and LucasArts have acknowledged this publicly,” I’m going with a new MMO or maybe even a revamp on Galaxies.
February 15th, 2008 at 10:11 pm
Yep, it looks like there won’t be a new KOTOR for a little while…