I was getting the below message from Visual Studio 2010.
\"This project is incompatible with the current version of Visual Studio\"
In case you came here looking for the issue with ".smproj" file, it is because you are missing SQL Server Analysis Services(SSAS). To over come this, install SQL Server Data Tools(SSDT) in your system, restart your Visual Studio and it will work.
Thanks.
This issue might be caused when using VS 2015 with Update 3 installed on one PC and without update 3 installed on another. This was the problem in my case.
I checked if i could create a new solution and was unable because SSAS,SSIS and SSRS weren't there as options.
I downloaded SSDT from here and installed and it worked...
https://docs.microsoft.com/en-us/sql/ssdt/download-sql-server-data-tools-ssdt?view=sql-server-2017