As a follow up, MegaRock recently managed to unearth near complete models for Lan, Mega Man (pictured) and an assortment of other items of interest that are vastly superior to those featured in the video, giving us a much better look at this scrapped project. Check out the newest findings at MegaRock's Photobucket.
Kind of makes you wonder why such a project was ultimately scrapped. Care to fill us in Mr. Christian Svensson?
"Twas before my time at Capcom so I don't know the answer.
There is something you are presuming: that it was ever actually in production just because of the existence of a few assets. This could have been just exploratory R&D/preproduction with no budget associated or greenlight happening (it wouldn't shock me if that were the case). And for whatever reason (maybe from what was learned during pre-pro) that it wasn't put into full production."