"We are doing fine," says Feargus Urquhart, CEO of Obsidian, just a day after Aliens RPG, arguably the developer's most anticipated project, was said to have been forcibly burst from its chest by publisher Sega. Despite the rumored bloodletting, the executive seems encouragingly upbeat, telling our sister site Big Download that the studio has no plans to close up shop. In fact, the exec says that work continues on its espionage RPG Alpha Protocol and, according to Urquhart, "another couple of properties."

Yesterday's rumor painted a much bleaker picture for the company, with multiple sources claiming Sega's reported actions had left the Neverwinter Nights 2 dev in dire straits with some 20 employees let go as a result. Urquhart wouldn't confirm any of this, however, leaving us wondering if by "doing fine" he is being sincere or is simply in shock. If all of this turns out to be true, we doubt we could put on a brave face while staring down at our freshly eviscerated trunk.

This article was originally published on Joystiq.

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