Team Ico is a first-party developer founded in 1997, working under Sony Computer Entertainment Japan (SCEJ) in Tokyo. The development team, lead by former artist Fumito Ueda, was largely made up of people outside of the games industry, picked in hopes of creating something unique.
While the development team started off small, their size expanded greatly during development of their second game, Shadow of the Colossus.
They began proper development of their first game ICO, back in 1998, designed for the original PlayStation. However, due to hardware limitations, it was eventually released on the PlayStation 2 in 2001 to critical acclaim, but it sold poorly.
Team ICO then started development of their second title in 2002, eventually becoming Shadow of the Colossus, first released in 2005. The game - much like their previous effort - received a similar critical reception, but sold much better, becoming Japan's top selling game in its first week of release, and selling enough copies to earn a "Greatest Hits" release in North America.
In February 2007, Team Ico announced a new project for the PlayStation 3 via a full page advertisement in Japanese magazine Famitsu. Almost a year later, the first screenshot for the game was shown via Sony's careers page.
In March 2009 at the Game Developers Conference '09, Fumito Ueda stated during a Q&A session that "it [the new game] might be similar to what's been done", and "The essence of the game is rather close to ICO".
On May 19 2009, PlayStationLifestyle.net released several images and a video of the studio's newest project. Tentatively titled Project Trico, the footage began with the scene shown previously in the first image. It showed a boy together with a giant feathered beast traversing vast temple ruins, the architecture similar in style to both ICO and Shadow of the Colossus. It was revealed to be old footage however, shown internally within Sony.
On June 1, 2009 the game was officially revealed at Sony's E3 press conference, with the first trailer being shown. It was an updated version of the footage that had been leaked previously, with the scenes slightly edited and now showing a lot more polish, in addition to completely new scenes. The game's title was revealed to be The Last Guardian. Sony Computer Entertainment announced at E3 that The Last Guardian is set for a 2010 release.