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Nintendo could pick up Factor 5. If they were developing the Kid Icarus game then they would have known this would have happened and would have already picked them up. So either those rumors are false or Nintendo is in the process of buying the company again.

As for Free Radical, remember the team was formed from the Goldeneye team to escape being under a large publisher. They'll either go form another small publisher, join Zoonami, or go to some moderate sized publishers.