Coleco emerged from relative obscurity late last year, joining forces with Retro Video Game Systems (Retro VGS) to announce a new cart-based console called the Chameleon. The nostalgia-inducing machine made an appearance at Toy Fair last month which fueled the idea that this was all a big scam. Here's the story.

Coleco partner Chris Cardillo recently told Engadget that Retro VGS decided that the work they have created is not sufficient to demonstrate at this time. As such, Coleco can no longer proceed and the Chameleon project is being terminated. Cardillo did say the separation was amicable, so there's that.

Those that have kept close tabs on the Chameleon project probably saw this development coming. Over the weekend, David Giltinan, managing editor of Retro VGS's Retro Magazine, announced he was leaving the company due to problems with the Chameleon project. He didn't specify exactly what went wrong (he said none of them really knew the full story yet) but decided he needed to separate himself from everything associated with it.

Unsurprisingly, Retro VGS has since deleted its Facebook page and its website is no longer loading.

So, what really happened?

As Bit-Tech points out, the whole project looks to be a scam on Retro VGS' part. During Toy Fair, some attendees noticed that the Chameleon console appeared to be little more than a SNES Jr. Super Famicom clone taped inside an Atari Jaguar console shell (heck, it even used an SNES controller).

To ease tensions, Retro VGS posted a photo of a "prototype" Chameleon with a translucent casing on its Facebook page. Eagle-eyed readers quickly pointed out that the "custom, FPGA-based hardware" was simply an old PCI video capture card.