The thread title is misleading. He didn't say it isn't happening, he just said it's not in development. People keep forgetting that this is the same man who said there wouldn't be a second XIII sequel, and we got just that. He also denied the rumor that Versus XIII was to be rebranded FFXV, and that happened as well.

You can't really take anything these guys say at face value anymore. I fully believe, 100%, that FFX-3 is happening, no matter what Kitase says, and I can't wait for the butthurt explosion when it's officially announced.