Originally saw the article posted on PS3Center, but the original source is here. I wrote it off at first, but based on the other posts, it definitely looks like the blogger is either a Free Radical or LucasArts insider...
It sucks, Free Radical's engine looked great, being able to go from ground to air to outer space all in one map. Unfortunate news.
EDIT: Sorry for the misleading title, meant to clarify STAR WARS Battlefront.
First of all, let us talk about StarWars Battlefront III. Originally, the game was intended for a 2008 release on Xbox 360, PlayStation 3 and also on the PC platform. Just like it was the case with TimeSplitters 4, FRD was also working on a "downport" for the Wii platform. Still, some delays and quality issues made LucasArts decide to make FRD redundant. Really? There was more to it.
PS2 and PSP versions were and are in development at Rebellion - the studio which made Star Wars Battlefront: Renegade Squadron for PSP. These versions are going to be released later this year if everything works out as planned. Rebellion did know that Free Radical Design had been working on the next-gen versions of the game since 2006. Nevertheless, they tried to get their own deal for SW Battlefront III on Xbox 360 and PS3, promising lower costs and a faster development. They pitched different PS3/Xbox 360 prototypes using their PS2 version as a foundation while using FRD's assets which were provided by LucasArts.
It is not a nice way - but so did Rebellion. In late 2008, they struck the deal. Free Radical Design was not informed by any party about these negotiations right until Rebellion and LucasArts had signed everything.
Still, we might not even get Star Wars Battlefront 3 for Xbox 360 and PS3 from Rebellion. Although they promised low production costs and a tight deadline, the targets set by Rebellion's management were impossible to fulfil. It was intended that the developers who were already working on the (not that great) PSP and PS2 versions would also start development on next-gen versions. Problem was that there were not enough "human resources" and not even Rebellion's developers are able to work 24 hours a day in order to meet agreements made with LucasArts.
So what will happen now? You will get a PS2 and PSP version later this year developed by Rebellion. Next-gen versions are in limbo. Will Rebellion be able to deliver them or will LucasArts look out for a new developer? Or might they even take the Indiana Jones route? It would not make me wonder if they asked for a cheap Wii port of Rebellion's PSP version.
With regard to Free Radical Design, it is interesting to note that they were already working on pre-production tasks for StarWars Battlefront IV - also intended for Xbox 360, PS3 and PC. In future, we may provide some artwork on that.
It sucks, Free Radical's engine looked great, being able to go from ground to air to outer space all in one map. Unfortunate news.
EDIT: Sorry for the misleading title, meant to clarify STAR WARS Battlefront.