Baten Kaitos 3DS was rumoured way back in 2011, shortly before the press event in which Nintendo announced a number of new 3DS games, like Monster Hunter 3/4 and Fire Emblem: Awakening. The art style is very reminiscent of the pre-rendered backgrounds used in those games, and given Nintendo's close relationship with Namco, I don't think it would have been too hard for them to get hold of the IP.
This could have been shelved, but given Nintendo keep projects on the go in the background (Link Between Worlds/Majora's Mask 3D both had protracted development cycles), it's possible this project was downgraded in order for Monolith Soft to help on a number of more commercially important projects. Given Nintendo's struggles to keep up with HD development, it's also possible this project was greenlit before it was clear how many resources and how long a development time X would need. Now X is wrapping up, we may hear more about this.
Personally I think Baten Kaitos is a great fit for Wii U or 3DS, but is more likely to come to 3DS.
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