It was announced on this week’s Bururaji (Blazblue video podcast) when they were talking about the new stuff coming out next year, like the drama CDs, soundtrack and Blazblue PSP.
The game is going to be 500 points and is going to be released in January, before Blazblue PSP. It’s a 4 player royal rumble style fighting game with ad-hoc multiplayer, that looks a bit similar to Powerstone. The cover has five characters (Rachel, Jin, Ragna, Noel, Taokaka) so those may be the only characters available in the game. Sad no Tager or Bang or Litchi.
Link to the podcast: http://gamenyarth.blog67.fc2.com/blog-entry-4926.html?id=1260444540
The footage of the game is shown at the 37 minute mark. I think at 34 or 35 they show off the CDs plus Blazblue PSP too.