Ex-Rare employee, Donnchadh Murphy, who worked on games like Killer instinct Gold, Conker's Bad Fur Day and many others gave an interview for the website Not Enough Shaders.
Here is a portion of the interview:
NES: -"Are there any Rare games you would like to see as HD remakes on Xbox Live Arcade?"
Donnchadh Murphy: -"Probably the same game every Rare fan wants to see and that’s KI3 (Killer Instinct 3). We all wanted to make KI3, but Microsoft were more interested on broadening their demographic, than making another fighting game. So it never got made, I doubt it ever will."
In this interview, Murphy also talked about Conker and some other aspects of the company.