Factor 5 is working on two games to be released via PlayStation 3's e-distribution network. According to a Gamasutra interview with company president Julian Eggebrecht, Factor 5 is excited to return to tacking on smaller projects, noting that "people who work on these two and a half year, three year projects have a chance ... to work on something small again."
The developer is currently working on the gorgeous PS3 title Lair, pictured, and has a long history of making technically gorgeous games, making the Rogue Squadron series for both Nintendo 64 and GameCube. Given Factor 5's expertise and beauty and Sony's 500MB cap on downloads, we're excited to see what they can conjure.
Joystiq impressions -- Lair (PS3)