When Intel canceled Larabee it said it would update the status of PO in 2010, but there's been no word as yet. As a fantasy FPS, Offset looked primed to deliver the sort of gameplay we haven't seen since Hexen. It's widely rumored that Intel was offering Offset as a potential development framework in its pursuit of the next-generation PS4/XBox 720. It's worth noting, however, that while Intel canceled its first-generation Larrabee, it never said it was canceling the entire project. A software development kit is supposedly in the works and Intel's original cancellation notice implied that GPU hardware did exist, but would be used internally.
Hopefully in the midst of the development possibilities, Larrabee confusion, and console chasing, the actual game gets out the door. Based on its artwork and gameplay videos, it'd be a shame for Offset to end up on the ash heap of Intel's (second) failed attempt to build a competitive GPU. Hopefully we'll learn more in the not-too-distant future.
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