Microsoft has confirmed that, after the required consultation period, it is indeed closing Fable developer Lionhead Studios in the UK, with today being its last day of operations.
Microsoft first announced that it was proposing that Lionhead close down in early March after deciding to end development of its RPG Fable Legends for the Xbox One and Windows 10. UK regulations required that Microsoft enter a consultation period, during which it could find a buyer for the studio. However, that did not happen.
Eurogamer got a statement from a Microsoft spokesperson:
"We can confirm that after much consideration over the six week consultation period with Lionhead employees, we have reached the decision to close Lionhead Studios. We have nothing but heart-felt thanks for the team at Lionhead for their significant contributions to Xbox and the games industry."
Lionhead Studios was formed in 1996 and was co-founded by famed designer Peter Molyneux. It developed games like Black and White, The Movies and the first of the Fable series of fantasy RPGs before being acquired by Microsoft in 2006. Lionhead continued to develop games in the Fable series under Microsoft. Molyneux left Lionhead in 2012.
Fable Legends was announced in 2013 for the Xbox One and its Windows 10 version was revealed in early 2015. The developer had been in closed beta testing for Fable Legends before the decision to cancel the game was announced. There were rumors that some Lionhead team members were in talks with Microsoft to continue development of the game as an independent unit but those reports did not pan out.