Update: It looks like yesterday's Knight of the Old Republic reboot rumour may have been all smoke and no fire as it has since been clarified that the KOTOR reboot prototype actually happened some time ago and is not a current project. It seems Bioware were interested in the idea at one point but did not give it the greenlight for full scale production.
Kotaku's Jason Schreier set out to clear things up last night, stating that he too had heard about the KOTOR reboot some time ago from sources at Bioware. However, he also noted that this was “old info” and that the KOTOR reboot project did not end up being greenlit. Bioware is apparently no longer working on the project and has instead been focussing on a Destiny-style game alongside Bioware's Edmonton studio. This particular game will be announced at E3 later this year.
Aside from that, Kotaku also emailed Liam Robertson, the journalist who originally broke the KOTOR revival story in a podcast. In that email, he clarified that he no longer believes that Bioware is working on KOTOR but also added that it is possible that he misinterpreted some of the information his sources gave him.
Original Story: Ever since it was announced that EA had obtained the Star Wars video game license, many have been hoping that perhaps Bioware would be put to work on a Knights of the Old Republic 3. Now, it seems that fans of the original KOTOR games may get the sequel they've been hoping for as reports this week claim that Bioware Austin has been prototyping a new Knights of the Old Republic game.
The information comes from journalist, Liam Robertson, who is part of the site ‘Unseen64'. During a recent Patreon podcast, Robertson claimed that Bioware's Austin-based studio is now exclusively working on Star Wars games and aside from The Old Republic MMO, there is currently a team there also working on reviving the KOTOR franchise.
“I’ve heard that it isn’t exactly a remake anymore, but it started as a remake/revival. Now it’s kind of going from that blueprint in sort of its own original thing. I guess we’ll see what that turns out to be, but they are prototyping it right now”, Robertson said. Now, while they did prototype something related to Knights of the Old Republic, we are unsure how far that prototype came along. There are a lot of twists and turns in the creative process, so while this project may have started off as something based on Knights of the Old Republic, we don't know if that plan has changed since.
Aside from that, Drew Karpyshyn, the original writer of Knights of the Old Republic (and Mass Effect), has also revealed that he is working on a new game, after returning to Bioware in 2015. Karpyshyn could be working on any number of projects though, so this doesn't really count for much in the form of evidence.
KitGuru Says: As interesting as it is to hear that some folks at Bioware are still interested in returning to the KOTOR series, there isn't enough information here to come to any conclusions. Given that all we've heard about is a prototype, it is quite possible that it never really took off, or it didn't get the greenlight for full-scale development.