On Thursday rumors started up that developer Obsidian Entertainment had to lay off some team members as a result of Sega canceling their long-in-development Aliens RPG project. Neither Sega nor Obsidian have commented officially on these reports. However Obsidian's CEO Feargus Urquhart has commented to Big Download on reports from our sister site Joystiq that Obsidian is "apparently on the ropes."
According to what Urquhart told us, "We are doing fine and do not have to shut down operations. We are still actively developing Alpha Protocol and are working on another couple of properties." Alpha Protocol is Obsidian's other game for Sega, a third person action-RPG in the super-spy genre that is expected to be released sometime in 2009. Urquhart would not comment on the rumors of the Aliens RPG cancelation nor on the reports of layoffs at the company. One of their other games they might be working on is a rumored third expansion pack for Neverwinter Nights 2.