I think the movie idea will not be cancelled. Once the games are finished they will come. I remember reading somewhere that the Feature Films/Movies would be a lot darker in a sense like AO, but also go into a lot more detail and explain a lot more about oddworld than the games. So I dont think they would cancel such an important part of the overall Oddworld franchise, especially something that would connect everything we know about oddworld and want to know very smoothly.
-Al the Vykker
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