Fable Legends Cancelled Lionhead Studios to Close

And the studio founded by Peter Molyneux could be closed. The news was revealed on the official Xbox newswire by Hanno Lemke, general manager of Microsoft Studios Europe.

"After much consideration we have decided to cease development on Fable Legends, and are in discussions with employees about the proposed closure of Lionhead Studios in the UK," he explained. Lionhead, a British studio founded by Peter Molyneux in 1996, has developed acclaimed titles in the Black & White and Fable series. It was acquired by Microsoft in 2006. Molyneux left Microsoft and Lionhead in March 2012 reports gamespot today.

"The Lionhead Studios team has delighted millions of fans with the Fable series over the past decade," Lemke added.

Microsoft has not yet outright confirmed the studio will close and is instead saying it is "in discussions" with the employees. This is likely because UK law requires employers to create a consultancy period of at least 30 days. During this, measures to avoid redundancies are to be explored. The period also gives those affected some time to search for new jobs.

GameSpot contacted Microsoft for further details on Lionhead's status: "We aren’t sharing additional details today beyond that we have ceased development on Fable Legends, and are in discussions with employees at Lionhead about our proposed closure of the studio as well," said a spokesperson.

These have been tough decisions and we have not made them lightly, nor are they a reflection on these development teams--we are incredibly fortunate to have the talent, creativity, and commitment of the people at these studios," Lemke continued.

"Press Play imbued the industry with a unique creative spirit behind games like Max: The Curse of Brotherhood and Kalimba, which both captured passionate fans."

In his statement, Lemke said Microsoft will remain focused on investing and developing first-party games. It will also support those impacted by the closure and cancellations.

"These changes are taking effect as Microsoft Studios continues to focus its investment and development on the games and franchises that fans find most exciting and want to play," he said.