UPDATE: 6/21/2021 7:42PM EST: Harada took to TwitLonger to straighten out what he calls a mistranslation. He says that his meaning of the phrase ""Okura-iri" is not that the project died, but that it was put on a shelf. While this doesn't do much to help Tekken x Street Fighter actually happen, Harada seems to be assuring fans that there is still hope.
Sad news for those still holding out hope for the Tekken x Street Fighter game that would pit the characters from the Tekken universe against those from Street Fighter. It seems that the project, though partially complete, has been cancelled. This news comes from the director of each title during a recent interview.
The collaboration between the Tekken and Street Fighter universes was first announced 11 years ago during San Diego Comic Con. This was part of a partnership between Bandai Namco and Capcom that would see the creation of games that would incorporate the iconic fighters from both universes. While Capcom did release Street Fighter x Tekken back in 2012, Namco's game was slower moving. Though director Katsuhiro Harada did insist the game was still moving forward for several years.
Then in 2016, Harada gave an interview with Gamespot where he confirmed that the game was no longer in active development. While he offered a few reasons for this, the biggest appeared to be the fear of splitting the two franchises' communities; "We don't want to split these communities, so a good window in which to release Tekken x Street Fighter is something that's become difficult recently. So it's on hold for the moment."
Fast-forward to 2019 where Harada assured fans that the game was still in development, just moving forward extremely slowly. With the continued success of Tekken 7 and its DLCs, the collaborative game was becoming harder to justify. Now, in the most recent episode of Harada's Bar, a video series where Harada sits down with folks from the game industry to share a drink and answer questions, Harada and Tekken 7's director Kouhei Ikeda gave an update on the long-awaited game. Though the game was about 30 percent complete, the project is officially dead.
Harada and Ikeda sound really disappointed about the fact that the project was never able to gain any traction. They assure fans that they were "working really hard" on the game and were excited to show off the characters. Though fans can get a small taste of what the project could have looked like through Akuma's model in Tekken 7; "We even had motions, which you can see reflected in Akuma. The developing experience was useful. We wanted to show it, but the project died." It is a shame that the project could never come to light because it seems like Namco was definitely passionate about it.