Lionhead has confirmed
recent job layoffs, downsizing its total staff from 250 to 200. The cutbacks also signal the end of some of the
studio's current projects. Lionhead founder Peter Molyneux told remaining employees that only two titles, both for
next-gen consoles, will continue to be developed. The sequel to Fable—said to be in development for the
past year—is expected to be one of those games.
Analysts have cited poor sales of Lionhead's most recent PC titles, The Movies and Black and White 2, as primary causes for the decision to resize the studio. Activision, publishers of The Movies, dropped the title last month, destroying hopes for a console port. In addition, rumors have begun heating up that Molyneux is again seeking to sell Lionhead. Microsoft and Ubisoft are the most prominent potential buyers. Although, Microsoft is likely wary of offering the big bucks given Rare's poor performance since the Xbox-maker acquired that studio for $375 million back in 2002.