After 2 years of speculations and rumors, the much-talked about Halo MMO is now officially canceled. The news hit the web following Microsoft's announcement that Ensemble Studios will be closed after the completion of Halo Wars, and the subsequent cancellation of another unannounced MMO project -which turned out to be Halo.

Gamasutra.com and Massively.com followed up this story, confirming that Halo MMO was canceled mid-late 2007 by Microsoft execs, and pointed out a Flickr account with a bunch of unreleased concept art and mock-up screenshots, depicting Alien worlds, weapons, vehicles and several prototype character models.

Here's Microsoft Game Studios' official announcement, further explaining the reasons behind closing Ensemble Studios, and the future of its key IP titles:

Microsoft has decided to close Ensemble Studios following the completion of Halo Wars. After the closure, the Ensemble leadership team will form a new studio and has agreed to provide ongoing support for Halo Wars as well as work on other projects with Microsoft Game Studios.

The team at Ensemble has made invaluable contributions to the games industry with their Age of Empires and Age of Mythology games and with the highly anticipated release of Halo Wars. This decision does not reflect at all on Ensemble's talent or the quality of Halo Wars. in fact, many people who have had a chance to test drive Halo Wars agree that it is on track to being a fantastic game.

This was a fiscally-rooted decision that keeps MGS on its growth path. While the decision to dissolve Ensemble was not an easy one, Microsoft is working to place as many Ensemble employees who do not move to the newly formed studio into open positions within Microsoft as possible.

As to our overall strategy at MGS, it remains the same. We are committed to growing MGS with world-class talent both internally and with our external partners around the globe. We have recently added some well-known developers to our team and will continue growing the team.

We're particularly excited about the titles we have in the pipeline and continue to evaluate additional opportunities to bring incredible games to life with the industry's best. Our investment in games has never been greater than it is today.

All is not lost though, as Microsoft's Phil Spencer notes in this article at gameindustry.biz, saying that a couple of Halo-related projects are still in development with possible expansive online options being considered. We'll keep hoping for now!

Check our Halo gallery for all the previously unreleased concept art!