Early today, PS3 Land reported that developer Track7 (yeah, I've never heard of them either) had cancelled development on their upcoming game Theseis (yeah, I've never heard of it either) due to overwhelming production costs. It was immediately jumped on as the first case of a developer officially avoiding the PS3 because of cost.

Later, however, Track7 claimed the article was in error, saying:

PS3land.com wrote an erroneous article on June 29, 2006 regarding track7games and our upcoming game, "Theseis".

track7games would like to clarify that we never cancelled something that did not exist in the first place. We plan to develop "Theseis" for PC and Xbox360 in the near future. As for the PS3, we simply made a strategic decision to not move ahead because we deemed it not probable at this time.

So it turns out the game was never in development for the PS3 to begin with. Yet I think the principle still remains; they avoided the PS3 because it wouldn't have been cost-effective for them. At least, that's the best interpretation I can make out of the odd turn of phrase "deemed it not probable." The only other guess I can manage is that they didn't think the PS3 would have a big enough installed base at the time.

When the original story came out, there were comments from some along the lines of "I've never heard of these people or this game before, so who cares if they can't make games for the PS3." That's really kind of missing the point about the concerns over development costs. The big guys you do know will always be able to soldier on; they've got the cash flow and the established franchises. It's the ones you don't know about, who may be the next big thing if given the opportunity, that you need to watch out for.

Source: IGN