Microsoft has announced it is closing two of its internal game studios; Lionhead in the UK and Press Play in Denmark. The Xbox One and Windows 10 games that were under development at those studios, Fable Legends and Project Knoxville, have also been canceled.

In a statement, Hanno Lemke, the general manager of Microsoft Studios Europe, said:

"These have been tough decisions and we have not made them lightly, nor are they a reflection on these development teams – we are incredibly fortunate to have the talent, creativity and commitment of the people at these studios. The Lionhead Studios team has delighted millions of fans with the Fable series over the past decade. Press Play imbued the industry with a unique creative spirit behind games like Max: The Curse of Brotherhood and Kalimba, which both captured passionate fans. 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."

He added that Microsoft is working with the team members at Lionhead and Press Play to either offer them new jobs in the Xbox division or to find them work in other parts of the game industry.

Lionhead Studios was formed in 1996 and was co-founded by famed designer Peter Molyneux. It developed games like Black and White, The Movies and the first of the Fable series of fantasy RPGs before being acquired by Microsoft in 2006. Lionhead continued to develop games in the Fable series under Microsoft. Molyneux left Lionhead in 2012. Fable Legends was announced in 2013 for the Xbox One and its Windows 10 version was revealed in early 2015. The developer had been in closed beta testing for Fable Legends before today's cancelation.

Press Play was formed in 2006 and acquired by Microsoft in 2012. In 2015, the studio showed off three game concepts and asked the public to vote on the one they liked best. Project Knoxville, a multiplayer action game, was selected but now it appears it will never be completed.