I just headed over to Wii AMN, now known as Kombo.com, and saw this report. According to them, they got this info from a "credible source". I'm not saying I 100% believe this is happening, but Factor 5 coming back home to Nintendo and this rumor seems like a nice fit(when you consider F5 and Lair, Nintendo handing franchises to other devs, the state of the KI franshise). If Kombo is saying this is a credible source, it must be someone who has tipped them off accurately in the past, or at least someone they know who has some ties to Factor 5 or Nintendo.

Factor five??!? More like Kid LAIRicus! M'I'rite???</petty factor 5 bashing >

I hope you're right! Although I've not played Lair, we've all heard how terrible it was and I hope they do better with the motion controls..  http://wii.kombo.com/article.php?artid=11331

...is this that game IGN was hyping awhile ago?

The_vagabond7: in my best Count Dooku voice...Surely you can do better! :)

damkira: Although I haven't played Lair, I'm sure it would be better than that. Still, I will get Lair whenever I get a PS3(will be cheap by then).

ClaudeLv250: That crossed my mind too.

With Nintendo involved in some way it won't turn out like Lair.

with graphics not being the main focus.. i'm sure Factor 5 would take into consideration gameplay, unlike what they did with Lair..

Anyways, we'll see

So Kid Icarus is going to fly around really smoothly and evenly shooting rapid fire arrows when you hold in a button and then wrap a rope around some giant 4 legged monster to take it down?

Seriously... have they ever made a non-rogue squadren type game? I can't name any. (Not sayin they don't exist. Just don't know of em.)

I thought F5 has always a high-graphics developer. I thought that was their 'thing.' I find this rumour dubious. I would think that an IP like this would go to an internal dev team. Maybe Nintendo has decided to use some cash to farm dev work, rather than buy studios, but...

Kasz216: Turrican comes to mind. And yes, I'm sure if Nintendo allowed Factor 5 to make a new Kid Icarus game, it would literally be Rogue Squadron with my avatar slapped on top of the X-Wings.

famousringo: I had always hoped Intelligent Systems would do it, kinda seemed fitting. It won't be surprised at all if a new Kid Icarus title was handed off to a non-Nintendo developer. Star Fox and F-Zero are obviously bigger fish in the pond than Icarus is in Nintendo's book, and they handed them off. Kid Icarus has a nice cult following, but it's not one of their "big" franchises like Mario, Zelda, or Pokemon. So all things considered, I find it very plausible that someone else could dev the game.