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Did Obsidian cancel next generation Xbox game?

Did Obsidian cancel next generation Xbox game?
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Microsoft has cancelled an Obsidian game for the next generation Xbox after seven months in development, a report in Kotaku claims.
 
The game known as North Carolina was due to be released on the next generation Xbox and and was to be published by Microsoft, presumably as an exclusive title, but sources close to the development told Kotaku that the project had been shelved.
 
As a result, the publisher had to let 30 people go and Obsidian CEO, Feargus Urquhart was devastated.
 
We are on the case with Microsoft now and will let you know if we hear anything of interest.
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