Obsidian XBLA project 'put on hold'

A clearer picture is emerging of the belt-tightening operation underway at acclaimed US studio Obsidian.

The California group, along with cancelling a next generation game and laying off as many as thirty workers, has confirmed to Joystiq that its digital project is also suspended.

Previously it was understood that Obsidian was developing an XBLA game based on original IP, due for launch early 2012.

Studio CEO Feargus Urquhart has since said the game “is currently on hold; we are looking at where we might want to take it."

Last week it was reported that Microsoft pulled funding for a next generation game project underway at Obsidian.

The Fallout New Vegas creator is believed to still be working on the South Park RPG in a deal with beleaguered publisher THQ.