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Banjo-Kazooie 3, or Banjo Threeie (as described by Gruntilda at the end of Banjo Tooie), is rumored to be the next installment in the Banjo Kazooie franchise.
Banjo-Kazooie 3 was originally rumored to be in production at Rareware as a title for the Nintendo Gamecube. However, after Rareware's purchase by Microsoft in 2002, all Rareware development for Nintendo Gamecube games were either halted or transfered to the Xbox. Computer-generated imagery of the Banjo character were shown in the Xbox's unveiling video (which Rare had similarly done for a GameCube "demo"), but no mention of a Banjo game for a Microsoft console has surfaced since. Only Banjo cameos in the Rareware game Grabbed by the Ghoulies, which, was a Gamecube title, ported to the Xbox. Furthering the fact that this 3rd installment was supposed to be a title for the Cube. If the game is still in product, it will most likely by released for Microsoft's newest console, the Xbox 360.
In June 2005, Rareware announced that they would be developing titles for the Nintendo DS. This has led to suspicion that Banjo-Kazooie 3 is in development for the DS rather than the Xbox 360. Supporters of this theory argue that the Xbox console series is aimed toward more "mature" gamers (Microsoft nearly denied development of the platformer Psychonauts for the Xbox), and the Nintendo DS's general audience is more suiting for Banjo-Kazooie's cartoony style. Also, the Nintendo DS's 3D capabilities are close to those of the Nintendo 64, the system the first two games appeared on; this would allow the reuse of old character models, instead of making new models for an Xbox 360 game.
Recently many articles online have stated that Rareware is working on the development of "2 Secret Nintendo DS titles, One of which is confirmed to be set in the "Banjo Kazooie universe" There has been speculation on the phrase "in the Banjo-Kazooie universe" meaning it's more than likely not an original platformer.