Arc System Works created a DSiWare BlazBlue game with super deformed characters, the same “cartoony” characters used for their NicoNico videocast. The four player, Power Stone-like fighting game came out in Japan in January.
Seems like it’s coming to North America soon since we have a localized name and an ESRB rating. Here’s what the rating board said about the title.
This is an arena-fighter game in which players control small, stubby fighters that compete in fighting matches: last-man standing, hitting opponents to collect soba noodles, and capture-the-flag. The "cartoony" characters mostly punch and kick each other in the arena; characters stagger back and cry out in pain when hit.