Lionhead Studios Limited was a British video game developer founded in July 1997 by Peter Molyneux, Mark Webley, Tim Rance, and Steve Jackson.

Molyneux left Lionhead in early 2012 (shortly after the resignation of another group of developers who were dissatisfied with the company) to found 22cans because he wanted to be more creative.

He along with Lionhead's eventual co-founders, Mark Webley, Tim Rance and Steve Jackson, started developing plans for a new studio.

[1][11][12] In 1997, due to a series of events and from issues arising between Molyneux and Electronic Arts, he ultimately left the company in July 1997, co-founding Lionhead shortly after that,[13][1][2][11] along with Mark Webley, Tim Rance, and Steve Jackson (who co-founded Games Workshop and co-authored the Fighting Fantasy series[14]).

[21][18][14][15] The hamster's death was taken as a bad sign,[14] so other names, including Black Box, Red Rocket, Midnight, and Hurricane were considered but none had unanimous support.

[14][15] By the time the name was reverted, it was too late for Edge to amend their interview, so it was published with the company being referred to as Redeye Studios.

[14][2] In the interview, Molyneux stated that his ambition for the company was to "make it a world-renowned software development house – known in Europe, Japan and America for top-quality games".

[22] The studio was initially run out of Molyneux's mansion in Elstead,[18] before relocating to the University of Surrey Research Park in 1998.

[22] By August 1998, after the studio placed a job advertisement in Edge which received over 100 applications, Russell Shaw had been hired as Head of Music.

[23] Lionhead's first title was Black & White, which was published by Electronic Arts under terms of Molyneux's severance package from departing Bullfrog.

[29] In Lionhead's early years, Jackson wrote columns about the company and the development of Black & White for magazines such as PC Zone and Génération 4.

It involved a visit from the Mayor of Guildford during the development of Black & White: Healey had inserted a couple of wires into a woollen glove with the other ends put into a floppy drive.

[38] Big Blue Box Studios was founded in July 1998 by Ian Lovett and Simon and Dene Carter,[16][37] because of a desire to leave Electronic Arts and "the sadly ravaged corpse of Bullfrog it had left behind".

[36] According to Molyneux, The Movies came about because Lionhead listened to some financial advisers after the release of Black & White, who said that the company would die if it did not float on the stock market.

The company then went for initial public offering, which Molyneux said was "The most stupid thing that ever happened" because it meant having to expand quickly and develop more games.

[3] Ubisoft was another contender for the acquisition of Lionhead,[18] but Molyneux believed Microsoft to be "perfect",[45] and said people wanted "the safety and security of being part of something bigger".

[39] Microsoft wanted the Fable series to be an Xbox exclusive, and knew that if Ubisoft had acquired Lionhead, it would have gone to the PlayStation 3 instead, a conclusion that Webley concurred with.

[18] Lionhead were concerned with securing the company's future and protecting jobs and spent "months" preparing for the acquisition.

[18] Molyneux believed that Microsoft were pleased with the deal, and said that they made their money back due to the release of the "fantastically successful" Fable II (it won a BAFTA award for Action and Adventure in 2009)[46] for the Xbox 360 in 2008.

[18] Microsoft purchased a lease that enabled Lionhead to expand to multiple floors, a canteen, and an office revamp.

In June 2009, Molyneux became creative director of Microsoft Studios' European division,[49] a position he held concurrently with the head of Lionhead.

[18] Craig Oman, producer of Fable Anniversary, said that Molyneux's departure gave Lionhead an opportunity to reidentify itself.

Due to the switch to service based model, the idea of Fable IV was rejected, and experts in monetisation and competitive game design were hired to assist the transition.

[18] Creative director Carr (who had played major roles in Milo & Kate, The Movies, and Fable: The Journey) left in September 2015,[57] and a new one, David Eckelberry, was brought in.

To comply with UK employment law, there was a consultation period and the Fable Legends servers were not shut down until mid-April so that customers could get refunds.

This would have involved developing it with a new studio under licence from Microsoft, who supported the idea but it failed due to lack of time, and the fact that many Lionhead employees had found new jobs.

[10] One Lionhead developer, Charlton Edwards (the only one remaining who had worked on Black & White), said there was a giveaway and he received some of the "trophies".

Phil Spencer, the current head of Xbox at Microsoft, admitted that forcing Lionhead to work on Kinect and the impact of that on the quality of their games was at fault.