360-Gamer reports that Rare, the Microsoft-owned developer of the critically acclaimed financial flop Viva Pinata (among others), is hard at work on an XBox Live Arcade title:

According to UK magazine Edge, the title will be a completely original offering and is being worked on by Kameo and Starfox Adventures developer Nick Burton, as well as a team of ten others.

And unfortunately that's where the details end - we'll have to just wait and see what sort of quirky cuteness Rare comes up with for its first Xbox Live Arcade offering.

It's too bad that Viva Pinata didn't set Rare back on the path to profitability, but maybe the Live Arcade is exactly where Rare should be. After all -- the development costs are cheaper, the profit margin is high, and you can make a wacky game that takes some risks and be much more likely to recoup your investment. I'm looking forward to seeing what they come up with.