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In an interview with GameSpot, Tekken director Katsuhiro Harada said the active development of Tekken x Street Fighter is currently on hold. For fans of both franchises, it may be a disappointment but Harada did offer an explanation as to why Bandai Namco’s version of the cross-over fighting game will not see the light of day in the near future. After the announcement in 2010, Capcom released its version titled Street Figher x Tekken two years later, while Bandai Namco was still in development.
Harada told GameSpot the following statement during the interview:
“When we develop fighting games, we try to keep the core community in mind as well as the wider audience that wants to play these games, but currently the situation is with fighting games, you have Street Fighter V that just released–a lot of people are playing that fervently–and there’s a large crowd out there waiting or Tekken 7.”
He added: “We don’t want to split these communities, so a good window in which to release Tekken x Street Fighter is something that’s become difficult recently. So it’s on hold for the moment.”
The game developer had the “polygon models, moves, and systems” completed as of July 2013 and it was still in the works in August 2013.
[Source]: GameSpot: Tekken x Street Fighter No Longer in Active Development.