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Rumours of Project Milo's demise have, apparently, been somewhat exaggerated. Peter Molyneux took the, um, boy sim off to his TEDGlobal 2010 conference in Oxford, and gave a demo showing off what he's been doing with it since E3 2009.

This mostly included the game's early tutorial stages, where Milo has just moved over to New England and is looking around his new home. Interestingly enough, Molyneux is open about the way the AI behaves and responds, admitting that "most of it is a trick, but it's a trick that works."

So with the help of Kinect wizardry, Molyneux and his aide Dimitri had Milo plodding around squashing snails, and showed him how to skip stones across a pond. According to Molyneux, this tutorial phase lasts around 45 minutes or so, after which time the game recognises the players, and allows for more custom interaction.

Molyneux also revealed that the game uses cloud resourcing - Milo's brain isn't on disc, it's coming from everywhere that people are using it. And an absolutely fascinating project for this reason if nothing else.

It's not clear when Project Milo will hit retail, but Microsoft has recently said it doesn't expect to see it this year.

[via Wired]