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April 6, 2006

Microsoft buys game developer Lionhead

Posted by Kim Peterson at 9:57 AM

Microsoft's Game Studios division said this morning it has purchased the U.K.-based Lionhead Studios, known most recently as the developer of the "Fable" video game for Xbox and Windows.

With the purchase, Microsoft gets Peter Molyneux, considered to be one of the most creative and visionary developers in the industry and one with a long history in video games. Molyneux will be a managing director at Microsoft and will run Lionhead on a day-to-day basis. He'll report to Phil Spencer, general manager of publishing for Microsoft Game Studios.

Lionhead will remain based in Guildford, Surrey, in the U.K. It has 150 employees, and Microsoft said that there may be some overlap in responsibilities now among some employees. That could mean some layoffs are in the works. But Microsoft said it doesn't "expect additional layoffs in the games and production teams at this time."

The acquisition closed today, and the financial terms of the deal were not announced. Lionhead will begin creating content exclusively for the Xbox 360 and Windows platforms.

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