In a surprising blog post Monday morning, Microsoft announced that Lionhead Studios, known in recent years for the Fable franchise, is being shut down. Development is being halted on the long-planned cross-platform multiplayer title Fable Legends. Danish studio Press Play, which was behind Max: The Curse of Brotherhood, is being closed as well.

"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," Microsoft Studios Europe General Manager Hanno Lemke wrote. "We have nothing but heart-felt thanks for the members of Lionhead and Press Play for their contributions to Xbox and gaming. We are committed to working closely with those affected by today’s news to find them new opportunities at Xbox, or partnering with the broader development community to help place them in jobs elsewhere in the games industry should they desire."

Lionhead was founded in 1996 by Peter Molyneux—at the time well-known for PC classics likeand—along with Games Workshop's Steve Jackson and veterans from Molyneux's former Bullfrog Studios. After making a name for itself with the ambitiousseries of god games and original Xbox RPG, Lionhead was scooped up by Microsoft in 2006 . A series offollow-ups followed (including an ill-fated Kinect-powered spin-off ), before Molyneux left the studio in 2012 to start 22cans (which has been mired in some controversy of late).

In the last few years, Microsoft had put Lionhead to work on Fable Legends, a cooperative action-adventure first announced back in 2013. The game, which was shown in a variety of incomplete forms at trade shows over the years, had gone through a number of gameplay and structural changes during its drawn out development, including a transition to a free-to-play model announced last year.

Microsoft's statement did officially leave some wiggle room for Lionhead's fate, saying that the company was merely in "discussions with employees about the proposed closure of Lionhead Studios in the UK." Still, the overall tone of today's announcement leaves little question that the studio probably won't exist for long in its current form.

Danish studio Press Play, meanwhile, started life in 2010 with quirky platformer Max & the Magic Marker. The studio was picked up by Microsoft in 2012, securing sequel Max: The Curse of Brotherhood for the Xbox One's 2013 launch window. Both games got mixed reviews and failed to make much of an impression in terms of sales or buzz among players. Recently, Press Play had been working on Project Knoxville, a multiplayer survival horror game with the intriguing tagline "human nature exposed."

The closures leave Microsoft with a somewhat smaller stable of subsidiaries developing first-party exclusives for the Xbox One and Microsoft's own Windows 10 app store. The actual employees affected by the closures will likely be reshuffled to other Microsoft Studios companies like 343 Industries (Halo), Turn 10 (Forza), Rare (Sea of Thieves) and the recently acquired Mojang (Minecraft).