US developer Demiforce has cancelled plans to launch its Onyx connected games platform for iPhone, which had been trailed as bringing Xbox Live style community features to App Store games.

"Apple recently told us they couldn't guarantee Onyx-enabled games would be approvable in the App Store," writes boss Steve Demeter on his blog.

"They pointed us to certain areas of the terms agreement contract, but declined to elaborate further as to whether or not Onyx would comply with those guidelines. Ultimately, this presented a business risk that neither I nor my potential investors wanted to challenge."

Although Demeter says he takes the blame for not investigating these grey areas before, it's a puzzling development.

Apple's senior product manager for iPhone worldwide product marketing Eric Jue recently told PocketGamer.biz that Apple was happy for developers to be coming up with such community platforms:

"We have a very open platform, with technologies built into it that are free to developers through the SDK and the APIs," he said. "So if somebody wanted to develop that then they certainly could. It's open to the developer community and wherever they want to take the platform."

So why has a developer doing just that been discouraged sufficiently to make him stop?

The excitable view would be to suggest that Apple IS working on its own Xbox Live style platform after all, as some developers told PocketGamer.biz at the recent Mobile World Congress show.

We'll have to wait and see how other connected iPhone platforms, like Aurora Feint's recently-announced OpenFeint, fare when they get to the approval process.

"I hope their business model will mesh with Apple's approval system better than Onyx did, and I eagerly wait to see what can be done in this space," writes Demeter.

Meanwhile, Demiforce will now focus on pure iPhone games development, following on from the barnstorming success of its puzzler Trism.