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Via Joystiq:
More information.Obsidian Entertainment announced last year that it was working on "an original IP XBLA game," but times have changed. Targeting a launch for the first quarter of 2012, Obsidian CEO Feargus Urquhart said at the time it would be an "action RPG that's focused on fun."
Checking in with Urguhart about the project, we were told, "That project is currently on hold; we are looking at where we might want to take it."