What Happened to Lionhead Studios?

Lionhead Studios was established in July 1997 by Peter Molyneux, Mark Webley, Tim Rance, and Steve Jackson, emerging from the creative environment of Bullfrog Productions. The studio quickly gained recognition for its ambitious and innovative titles, starting with the god game 'Black & White' in 2001, which garnered critical acclaim and strong sales. This success was followed by the highly popular action RPG 'Fable' in 2004, developed by its satellite studio Big Blue Box, solidifying Lionhead's reputation for creating games with player choice and moral consequences.

Despite its creative successes, Lionhead encountered financial difficulties, leading to its acquisition by Microsoft Studios in April 2006. Under Microsoft, Lionhead primarily focused on the 'Fable' series, releasing 'Fable II' (2008) and 'Fable III' (2010), which were commercially successful. However, the studio also saw the departure of co-founder Peter Molyneux in early 2012, who sought more creative freedom and went on to found 22cans. This period also saw a shift in Microsoft's strategy, pushing Lionhead towards developing 'games as a service' titles, a direction that some staff found challenging.

A key turning point was the development of 'Fable Legends', a free-to-play, online multiplayer game that began development around 2012. Microsoft reportedly insisted on a 'games-as-a-service' model for the next 'Fable' title, rejecting pitches for a traditional 'Fable IV'. After years in development and a closed beta, Microsoft announced the cancellation of 'Fable Legends' and the proposed closure of Lionhead Studios on March 7, 2016. Following a six-week consultation period, Lionhead Studios officially closed its doors on April 29, 2016.

The consequences of the closure were significant, marking the end of a prominent British developer. Many former Lionhead employees dispersed to other studios or founded new ones, such as Mark Webley and Gary Carr establishing Two Point Studios. Microsoft later acknowledged the handling of Lionhead's closure as one of its "biggest missteps." The 'Fable' franchise, however, was not abandoned. In 2020, Playground Games, known for the 'Forza Horizon' series, announced a reboot of the 'Fable' series. This new 'Fable' game, described as Playground's own interpretation while preserving the series' conceptual identity, is currently in development. As of September 23, 2026, the new 'Fable' title is scheduled for release on February 23, 2027, for PlayStation 5, Windows, and Xbox Series X/S, with some former Lionhead staff confirmed to be working on the project.