Why Microsoft Shut Down Lionhead Instead of Selling It

After nearly 20 years of great video games, British developer Lionhead Studios was shut down by Microsoft last month. However, the reasoning behind closing Lionhead’s doors are somewhat complicated.

Kotaku UK claims multiple sources told the website that some of the largest video game publishers in the business offered to buy Lionhead, but Microsoft turned them down. Why? Because Microsoft didn’t want to part with the rights to Fable, the popular action RPG franchise created by Lionhead.

There were apparently several potential buyers lined up for the studio during its consultation period. Kotaku couldn’t name any specific publishers because the information is confidential, though letters of intent were reportedly filed.

A source close to Xbox told Kotaku that Microsoft refused to sell the rights to Fable with the studio, at which point “90% of the people interested just walked away.”

As Kotaku points out, without the Fable license, for Lionhead to make a new Fable title would have required their new publisher to reach a licensing agreement with Microsoft- something that would have cost them time and revenue.

Clearly these potential buyers (whoever they were) decided it wasn’t worth the effort in the end. If these reports are true, it’s frustrating to consider that Lionhead, along with hundreds of jobs, could have been rescued from the axe, if only Microsoft could have let go of Fable.

Then again, Microsoft would probably have been furious if Fable 4 landed as a PlayStation 4 exclusive.

What do you think of this report? Are the rights to the Fable franchise really worth hundreds of jobs? Let us know what you think in the comments.

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