Obsidian Entertainment - Development Overview @ Kotaku
Kotaku has written a lengthy article abour Obsidian Entertainment, the games they worked on, their buggyness, the ones that were cancelled and the games they are working on now.
This part is about South Park: the Stick of Truth and how they started with the game without any funding:
Obsidian wasn't getting paid at this point, but the prospect of a South Park RPG was hard to resist, so Urquhart agreed to keep plugging away at it. They built a prototype set in a house from the show. You played as a generic kid, and you could change your race or clothes by hitting the trigger buttons. If you walked into the living room, you could find Randy Marsh in his underwear, playing Guitar Hero. If you went to the kitchen, you could pick up a spatula, which would then transform into an axe that you could use to smash things.
It wasn't much, but it was the start of a game.
"We took it in to Matt and Trey," Urquhart said. "And Trey just grabs the controller and he's like, ‘This feels awesome!' And Matt runs up to the screen and he goes ‘That's the construction paper!' And they were like, ‘Let's do this." And that was that."
So they put together a contract and started working on the RPG. For a while, Obsidian worked directly for the South Park team with funding from their parent company, Viacom. But in late 2011, they decided to get a more experienced game publisher involved. A few companies showed interest. They ultimately went with THQ.