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According to a few reports, Star Wars: Knights of the Old Republic III is supposedly in development over at Obsidian Entertainment. The reports (and logic) indicate that the game will be on a next-next generation console (never thought I'd hear myself saying that) and such a system is likely the Xbox 2.
While it does sound true keep in mind that no official announcement has been made and as such, KOTR 3 remains little more than a hope. If we hear any new rumors on this popular Star Wars title we'll let you know.
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