Lionhead Studios has been acquired by Microsoft Game Studios (MGS), the company's division responsible for creating and publishing games for the PC and Xbox platforms.

Based in Guildford, England, Lionhead was founded by Peter Molyneux in 1997 and is known for role-playing games, sometimes known as "god" games, in which the player controls a complex world. One such game, Fable, was created by Lionhead, published by MGS in late 2004, and became a fairly successful Xbox title, selling more than 2 million copies since its release. (By way of comparison, Halo 2, the best-selling game on the Xbox platform, sold 6.4 million copies in the three months after its Nov. 2004 release.)

However, Lionhead's last two games for the PC, Black and White 2 and The Movies, did not sell well, and in Mar. 2006 Lionhead laid off approximately 50 of its 250 employees and said it would concentrate on developing only two titles, both for next-generation consoles. The acquisition ensures that Lionhead will be able to create these games, one of which is expected to be a sequel to Fable, and that they will be Xbox 360 exclusives. It also suggests that Microsoft hopes to use role-playing games to expand the audience for Xbox 360s beyond the typical young male gamer—the PC role-playing game The Sims is often cited as a crossover success because it appealed to more women than the typical videogame.

Lionhead joins several other game development studios acquired by MGS, including Bungie (creators of the Halo franchise) and Rare (whose next major creation, Viva Pinata for the Xbox 360, will also be the basis for an animated TV series in fall 2006). Terms of the Lionhead acquisition were not disclosed.

Microsoft Game Studios is at www.microsoft.com/games/.

Lionhead is at www.lionhead.com/.