Details on the fall of Lionhead Studios come to light

In a surprising move, Microsoft announced two months ago that it would shut down Lionhead Studios and cease all development on Fable Legends, a game which has been touted by the company as one of the first cross-play games between the Xbox One and Windows 10 PCs. Today, we learned more details about the closing of the renowned British game studio co-founded by Peter Molyneux in 1997 in a report by Eurogamer. The lengthy story reveals a lot of details about the demise of the studio since Microsoft bought it in 2006 after titles Black & White 2 and The Movies failed to achieve good enough sales.

To sum up this long story, Microsoft mismanaged Lionhead Studios who saw its elite developers leaving the boat as the internal culture shifted over the years. Furthermore, Microsoft didn’t want Lionhead Studios to release a proper sequel to Fable 4, but wanted the studio to develop a standalone opus which would be a “game as service”. However, as development costs already reached $75 million (which is massive for a free-to-play game), it became clear that the Microsoft had been too ambitious and that it was not the game that Lionhead Studios wanted to make and that Fable fans would enjoy.

The report also includes several interesting quotes from former Lionhead Studios head Peter Molyneux who share some details about Microsoft’s management of Lionhead Studios, such as this bit:

Microsoft paid all this money for us. They really respected us. And they really wanted us to continue doing the things that we did well, but they just wanted to make life better. They became more like an overprotective parent. They thought the way to make things better was to really embrace HR.

Lionhead Studios Logo

Lionhead Studios Logo

Fast-forward to 2012 during the discussions between Lionhead Studios and Xbox executives. The latter insisted on taking the franchise in a new direction, according to said a source with knowledge of the conversations:

“You make a service game or you get closed down.” It was the new big push from Microsoft and I heard that all first party studios got a similar message. However, some had more of a push back against it.

After Xbox execs had rejected the pitch for a Fable 4 game, Lionhead Studios had no choice but to develop a free-to-play game and a cross-platform game (something the team learned late during the development process in early 2015). One person who worked on the Fable Legends told Eurogamer:

We didn’t know about Windows 10 when we started developing Fable Legends. In fact, we were going to be on Steam. We had to make sure everything was carefully architected to make sure people couldn’t cheat. Otherwise, we would have ended up like The Division.

However, after spending $75M on the game’s development, it became apparent to Xbox execs that Fable Legends would not meet the expectations of Fable fans. Microsoft Studios Europe General ManagerHanno Lemke finally announced the cancellation of Fable Legends and the closure of Lionhead to the team, which was a massive shock. A source told Eurogamer:

The game was technically finished, the infrastructure was all in place, work had started on Fable next, and morale was actually quite high again. People were happy that Legends was coming to a close. We never really expected Legends to last a long time, but we never expected them to cancel it.

The biggest shock was the closing of the studio though. It felt as that because Microsoft hadn’t had the best year with their games that we took the brunt of the attack, rather than a big studio such as 343. The biggest stab in the heart though was that for roughly six years the studio had pretty much been tasked to develop games that Microsoft wanted us to make to show off tech. Very few people wanted to make Fable: The Journey and almost nobody wanted to work on Fable Legends.

It felt like the time was right to finally make that Lionhead 2.0 claim and build the game everyone wanted to play and we all wanted to make – Fable 4. We had some amazing in-house tech by the end, a foliage system to rival any other engines and a dynamic global illumination system which looked beautiful.

Close of Lionhead Studios

Close of Lionhead Studios

Before Lionhead shut down on April 29, a consultation period allowed several buyers to line up and provide propositions to buy the studio. A core team of developers tried to save the game with a plan called “Project Phoenix” which would have seen them finish the game and ship it as a new studio that licensed the game from Microsoft. According to Eurogamer, this plan was nearly successful as two Chinese companies had expressed interest in funding the creation of a new studio, but discussions took to long to materialize. A source shared more details to Eurogamer:

“Microsoft were supportive of it as an idea, but we ran out of time. During that period, Evolution got closed by Sony, and then within two weeks Codemasters picked them up. We were like, what the fuck? How did that happen so quickly? And it turned out the management team at Evolution had been given a heads-up months before as to Sony’s intentions. Maybe if Microsoft had done similar, it would have been a different story. Shit happens, unfortunately.”

We encourage you to read the full story over here.

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