The deal signifies SEGA's continuing drive to produce high-quality Western content for current and next-generation consoles. Obsidian, best known for the hugely popular RPG Knights of the Old Republic 2: The Sith Lords, is also currently working on the much-anticipated sequel to Neverwinter Nights.

"The development team at Obsidian has 'proven track record' stamped all over it," said Simon Jeffery, President and COO, SEGA of America, Inc. "When SEGA decided to create a fresh and captivating RPG franchise for new generations of hardware, we immediately knew who we wanted to work with."

"We are excited to be working with a great publisher like SEGA as they are willing and excited to launch new and visionary IP on next generation consoles," said Feargus Urquhart, CEO of Obsidian Entertainment, Inc. "At Obsidian, our focus is to make exceptional games and we see SEGA as a true partner in achieving that goal for our next epic RPG."

The deal is the latest in a string of similar announcements from SEGA that underscore the company's increased emphasis on Western content development. Previously, SEGA announced partnerships with developers Secret Level, Silicon Knights, Bizarre Creations, Monolith Productions (Condemned: Criminal OriginsTM), and Pseudo Interactive (Full AutoTM). SEGA also acquired development powerhouse The Creative Assembly (Total War series) in 2005.