Microsoft Buys Game Studio Lionhead

Microsoft announced Thursday it had acquired British game developer Lionhead Studios, creator of the popular "Fable" role-playing game. The news came alongside a promise that Microsoft would remain committed to the Japanese market, where RPGs are far more popular than the first person shooters preferred in the United States.

Lionhead will develop games exclusively for the Xbox 360 and Microsoft's Windows desktop operating system. The studio's founder Peter Molyneux said the deal will give Lionhead "the stability and opportunity to focus on creating world-class next-generation titles." Financial terms of the acquisition were not disclosed.