Coleco Holdings has officially withdrawn its backing from the beleaguered cartridge-based console project formerly known as the Coleco Chameleon, following the recent controversy over whether or not Retro Video Game Systems Inc. actually had a working prototype to show.

The possibility that Coleco might withdraw from the deal was first raised the day after we published our last post on the Chameleon’s troubles. In a statement released on 2nd March, the company stated that it had demanded to see a working prototype within seven days to secure its continued support. However, the time limit wasn’t reached as Coleco released the following statement via its Facebook page yesterday:

“The Update that you were all anxiously awaiting: Retro VGS has decided that the work that they have created is not sufficient to demonstrate at this time. Consequently, we can no longer proceed with the project and the Chameleon project will be terminated. This separation is amicable. We wish them luck in the future. – We thank the gaming community for their continued support, input, vigilance and trust.”

Retro VGS swiftly responded to the decision by closing its Facebook page and website, though its Twitter account is still active for the time being. It would seem that for the time being, the project is dead in the water – and while the split with Coleco was officially amicable, the project has caused a wealth of damage to the public image of related products and even caused staff to leave them.

As for Coleco, the brand is looking to work on future projects with new partners: “I wanted to make sure that you all know that we have every intention of launching new ColecoVision products with the RIGHT partners,” owner Mark Thomann stated on Twitter yesterday.

We’ve reached out to various parties including Retro VGS’ Mike Kennedy to find out exactly what went wrong for an upcoming issue of Retro Gamer, so keep an eye on the magazine for the full story.