Banjo Kazooie is one of the more talked about Microsoft-owned IPs because we haven’t received a new title since Banjo Kazooie: Nuts & Bolts in 2008. Since then we even saw the iconic characters join Super Smash Bros. Ultimate after it became a highly requested addition. Earlier in the Summer, it was claimed that there was no demand for a brand new Banjo Kazooie game which led many fans to lose hope about the future of this franchise.
According to industry insider Nate Drake, a new Banjo Kazooie project was greenlit by Microsoft last year and development on this project is still in the early stages. It is still unknown what studio could work on this and a lot could still change with this project.
(FYI) Insider Nate Drake has said that a New Banjo Kazooie is coming
"It's still an active project, but it didn't get the green light until early last year. There is a lot to do and development can change a lot (abandoned ideas, internal reboots, etc.)
Also, Phil said: "Banjo… pic.twitter.com/sQyKlD11bu
— Alan Feely (@IdleSloth84_) December 29, 2023
Who knows if this will become true, but Nate has been a reliable insider in the industry. Just make sure to take this with a grain of salt until it’s proven to be true.