What started out like an interesting update to Little Big Planet turned out to be flatly denied by Media Molecule and Sony.  In a Joystiq article it was originally stated that an update would bring about the opportunity to import images into your massive user created levels (for an even more realistic Gradius).  For now you are still stuck using the Playstation Eye.

While the idea would have been very cool and had propelled the game into even further into its “awesome” status, I think a little thing called copyright and the control of copyrighted material will probably hinder this idea much the same way as the music creator in Guitar Hero World Tour.  That and how many levels made entirely of boobs and penises would have gotten to play!

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No Little Big Planet Image Importing