I forget where I heard it, but the rumor is that Nintendo is bankrolling Factor 5 right now and that they have two project deep in development for them right now.
Factor 5 had a falling out with Sony after Lair and that hurt them really bad financially. Rumor was that they were gonna lay everyone off and close up shop, but from what I last heard, they were just laying off everyone that couldn't be assimilated into the ongoing Nintendo projects(roughly 35 people).
The Pilotwings rumor has been going on forever, so there is no need to go into any detail about that.
But the rumor right now is that Factor 5 is working on two games and they are both for Nintendo.
One of the rumored games is believed to be a flying game, and nothing is really known about the second.
What has also been rumored is that Factor 5 has already successfully ported RS3 onto the Wii, so we know they have a working Wii engine to play with. - if they really needed money that bad, why didn't they release the port of Rogue Squadron 3? New Play Control anyone? -
But if Nintendo is foting the bill, I'm pretty sure we can rule out another Rogue Squadron cause that belongs to Lucas Arts. So if Pilot wings is that 1st rumored flying game, what could theother possibly be?
I am personally hoping its a Star Fox(over seen by Miyamoto) & not a Kid Icarus or anything involving humanoid characters that are not flying in a ship of some sort preferably in space .