Lionhead Studios - The Inside Story

The idea for Lionhead was that it would focus on making high quality games, as Bullfrog had, but avoid falling into the trap of growing too large. And Molyneux hired well. Developers who joined him during the early days of Lionhead include Demis Hassabis, the AI genius whose DeepMind tech recently beat one of the highest-ranking Go players in the world; Mark Healey and Alex Evans, who would later leave Lionhead to co-found LittleBigPlanet maker Media Molecule; and Jonty Barnes, who now leads production at Destiny developer Bungie.

As part of Molyneux and Webley's severance deal with EA, the pair had agreed to give the publisher first refusal on its first game, whatever it turned out to be. It turned out to be a god game called Black & White.

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Most knew Lionhead was in trouble, and most knew The Movies and Black & White 2 hadn't sold well enough to keep the suits smiling. The venture capitalists were getting anxious, and that anxiety filtered down the ranks.

"Everybody gossips and talks," Charlton Edwards says. "I remember fearing we were in trouble. There was a sense of impending doom."

There were two offers on the table: one from Ubisoft, and one from Microsoft. Molyneux had met with Ubisoft boss Yves Guillemot in Paris multiple times about a potential deal. Those discussions went well, people familiar with the talks say.

It's an overstatement to say Microsoft swooped in and stole Lionhead from under Ubisoft's nose, as acquisitions of this type are rarely so dramatic. But it was the case that Microsoft wanted to secure Fable, which had done well on the original Xbox, as an exclusive role-playing series for the Xbox 360, and was aware that if it had gone to Ubisoft, it would end up on the rival PlayStation 3.

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