The next Fable game is shutting down — and the influential studio behind it may well be too. Today Microsoft announced that it is cancelling the free-to-play title Fable Legends, which was in development for the Xbox One and PC. The company also says that it is "in discussions with employees about the proposed closure of Lionhead Studios in the UK."

At the same time, Microsoft says that it's closing down Danish studio Press Play, the developer of games like Max: The Curse of Brotherhood and the mysterious Project: Knoxville, which has also been cancelled. "These changes are taking effect as Microsoft Studios continues to focus its investment and development on the games and franchises that fans find most exciting and want to play," Hanno Lemke, general manager of Microsoft Studios Europe, says.

Founded in 1996 by game design luminary Peter Molyneux, formerly of legendary Bullfrog Productions, Lionhead debuted with the god game Black & White, before launching new series like the fantasy RPG Fable and business sim The Movies. In 2006 it was acquired by Microsoft and shifted its focus entirely to Fable. Six years later Molyneux left Lionhead to form his own independent studio, 22cans, which released the troubled crowdfunded strategy game Godus.

"We remain committed to the development communities in the UK and Europe," Lemke says of the changes.