When asked about the effect that canceling London Studio projects The Getaway 3 and Eight Days had on other titles, Yoshida responded, "There are so many things that we want to do, more than we can do with the resources. So when London Studio was looking at the early work on EyePet and the prototype of Eight Days, they knew they couldn't do all of them." So ... EyePet it was.
Granted, we don't know with any certainty that Eight Days was going to be any good, but an original action IP on a still very core audience console would seem like something worth investing more time in over a ... virtual pet.
Yohshida also said regarding the London Studio, "There are even more things they're working on at early concept stage." Tip for the staff there: If you don't want your big games canned, don't mention your "pet" projects to Shuhei the next time he pops in for a visit.