"BioWare is one of the hottest names in RPG development in the world," said SEGA president Simon Jeffery. "Everyone at SEGA has huge confidence that Sonic is in the safest of hands, and that BioWare can create the ultimate handheld RPG experience for gamers of all ages."

Last year, BioWare formed a handheld division devoted to development for the Nintendo DS. At the time, the company sent around a community poll, asking whether fans would like to see a Nintendo DS port of well-known BioWare franchises such as Baldur's Gate, Star Wars: Knights of the Old Republic, or Neverwinter Nights.

"As huge fans of Sonic ourselves, we're committed to delivering a truly amazing story-driven experience within the Sonic universe, focusing on capturing the characterÂ’s broad appeal and placing him in a completely original adventure," added BioWare CEO Ray Muzyka. Some of the RPG-focused studio's most recent titles include Star Wars: Knights of the Old Republic (Xbox, PC), Jade Empire (Xbox, PC), and the upcoming Mass Effect (X360).

SEGA has been farming out much of its intellectual property to other developers, with After Burner: Black Falcon (PSP) by Planet Moon Studios and Sonic Rush (NDS) by Dimps serving as recent examples. The publisher also last month revealed another RPG partnership with Supreme Commander developer Gas Powered Games.