Tekken x Street Fighter is indeed still in the works. Those worried that the game may have been quietly put to bed will be happy to know that there is progress being made.
“We will say first off that the game is still in development, so you don’t need to worry about that. There are several reasons why we haven’t released any updates. One of the reasons is, Street Fighter X Tekken was released. That still had updates until recently. One interesting thing we’ve seen with that title when it came out was that it’s not quite what we expected. We are making progress, but everything is secret so we can’t say anything about that."
Speaking with Siliconera, Namco Bandai's Katsuhiro Harada reassured fans that Tekken x Street Fighter (TKxSF) is still in development and things are moving forward as far as progress goes. Platforms that the game will see releases on haven't even been revealed. With the next generation consoles set to launch in the PS4 and Xbox One and with the Wii U already seeing a Tekken Tag Tournament 2 release, it's very likely that Namco Bandai will pass on the current generation for TKxSF.
