Last year Obsidian Entertainment, developers behind the sequels for several major IPs including Star Wars: Knights of the Old Republic, Neverwinter Nights, and Fallout, announced they were working on an original Xbox Live Arcade game. Aiming for a Q1 release this year the game was hoped to be an action RPG focused on fun. This week Joystiq spoke with CEO Feargus Urquhart looking for some updates and were told:

“That project is currently on hold; we are looking at where we might want to take it.”

It’s been a bad week for Obsidian Entertainment who reportedly experienced a round of lay-offs and missed a bonus based on Fallout: New Vegas‘ metacritic score by one point.

Source: Joystiq