Further Update: While the Silent Hill series will continue, the specific Silent Hills project has indeed been cancelled, Konami confirmed in a statement:

Konami is committed to new Silent Hill titles, however the embryonic ‘Silent Hills’ project developed with Guillermo del Toro and featuring the likeness of Norman Reedus will not be continued. In terms of Kojima and Del Toro being involved, discussions on future Silent Hill projects are currently underway, and please stay tuned for further announcements.

Updated: Konami has sent out a Q&A responding to the series' supposed cancellation. While the company notes that it will continue to develop the Silent Hill series, it doesn't specifically mention that Silent Hills is still being made. The full Q&A from Konami is at the end of the story.

Original Story

In all of last month's drama surrounding Hideo Kojima's troubled relationship with Konami and the Metal Gear Solid franchise, there was little information on the fate of Silent Hills, the survival horror sequel collaboration between Kojima, film director Gullermo del Toro, and actor Norman Reedus. While the Kojima Productions logo was removed from the game's home page late in March, there was no official word from Konami regarding the project's fate. This weekend, though, a number of strong signs point to the game's outright cancellation.

The bad news started when a member of the Metal Gear Solid subreddit noticed a troubling message on Konami's Japanese site: "The distribution period of 'P.T. (Playable Teaser)' on PlayStation Store will expire on Wednesday, April 29, 2015." That cryptic "teaser" was the same interactive demo that hid the original Silent Hills announcement last August. It's possible Sony or Konami simply decided that P.T. had run its promotional course, but it seems odd to remove such a well-received free download with little warning... unless the game it's promoting no longer exists, that is.

The bad signs continued today, with del Toro reportedly telling a San Francisco International Film Festival audience that his collaboration on the project is "not gonna happen," according to tweets from multiple sources in attendance. Norman Reedus responded to reports of del Toro's statements, tweeting that he was "super bummed" about the apparent cancellation and "hopefully it'll come back around."

It's quite possible that Reedus doesn't have any insider information, and he's simply working off the same incomplete reports that we all have at the moment. IGN cites an anonymous source who clarified that del Toro was only speaking of his involvement in the project, not speaking definitively about the game's overall fate. "You'll have to go after Konami for those answers," the source said. (Konami and representatives for del Toro were not available to respond to a request for comment over the weekend).

On the other end, Polygon cites an anonymous "person with knowledge of the project's development" in reporting that the project is "effectively cancelled."

Given the already fragile relationship reported between Kojima and Konami, all the new smoke surrounding the project likely points to some sort of fire regarding Silent Hills' cancellation. If confirmed, the news would be another blow to a fan base that has been waiting patiently for the series to return to form following 2012's disappointing Silent Hill: Downpour.

Updated Q&A from Konami: