Peter Molyneux was "pretty ashamed" with the low-80s average review score Fable III received from critics.
Not because reviewers were wrong or harsh - but because they were right.
"I still think it was a good game," Molyneux told Gamasutra. "I just don't think it was a great game that took us to 5 million units.
"I know I probably should say it's a great game just respective of whatever it was, but the Metacritic score was sort of low-80s.
"I'm pretty ashamed of that, to be honest, and I take that on my own shoulders, not the team's shoulders.
"When you have something like that, which you can feel as a kick in the teeth, you have to pick yourself up and fight even harder."
"It didn't end up being the game that I dreamed it would be."Peter Molyneux
Even though Fable III will "net out" with the PC version close to 5 million sales, Molyneux said that that is "not the dream".
"It didn't end up being the game that I dreamed it would be, because I thought the mechanic of the ruling section were really good ideas. I thought they were good ideas, but we just didn't have time to exploit those ideas fully," he rued.
"I've been here before, and it just means that you've got to make whatever you do next twice as good. You're going to make the process and the planning process much, much better because, in the end, that's where you really suffer."
Fable III, as Molyneux - and lead combat designer Mike West before him - was Lionhead's shortest ever project. It took just two years.
"Last year we were just on the cusp of possibly getting everything we wanted in the game, or possibly having to come down and edit very heavily to finish the game in what was two years," said Molyneux. "You have to remember that Lionhead - especially me - has never created projects in less than two years. This was the first time we ever did that.
"We have lots of excuses, as you always do have excuses; but I don't think that's good enough."Peter Molyneux
"When we came down to the edit, the ruling section in Fable [III] was the one that really suffered a lot. The edit was very harsh and hard to actually make the game fit.
Another feature Molyneux said suffered was the Road to Rule, whereby characters could open chests to improve various skills. This was supposed to be a tricky toss-up for players as to what they would spend their experience points on. But there wasn't enough time to balance and the final manifestation of the Road to Rule meant most chests could be opened and skills upgraded, which made the system flimsy and superfluous. Fable III was also victim of bugs and unoptimised passages of play - the hallmarks of a rushed release.
"I look at Fable III and it's hard to be completely honest without offending people; but I know, when I read in the middle of a review that said the quality just wasn't good enough, I actually agree with those reviews," admitted Molyneux.
"Lionhead can't afford to rest on its laurels of its fans and produce low-quality stuff. We have lots of excuses, as you always do have excuses; but I don't think that's good enough.
"For consumers it's very simple: there's a bright light here, and there's an even brighter light there. They're going to go towards the even brighter light, and why shouldn't they? You just can't sit on your hands and say, 'Well, we know how to do it. It's Fable, so that's the way we do it.' You just can't do that."
"I hate the fact that people know what to expect from something like Lionhead."Peter Molyneux
Lionhead's output has been dominated by Fable since The Movies: Stunts & Effects was released in 2006. Next year, Lionhead will release Fable: The Journey, a first-person Kinect spin-off for the fantasy role-playing series. Predictable? Gimmicky? Perhaps - but they're two things Molyneux absolutely does not want Lionhead to be.
"I hate the fact that people know what to expect from something like Lionhead," he said. "'We know what Fable's going to be; we know what's coming next from Lionhead.' I hate that idea.
"We should, again, double down on freshness and originality without sacrificing without sacrificing quality.
"We should take a deep look at what people really enjoy about the experiences that [we] might have made and try and focus on those rather than focus on the gimmicks, which we kind of love to develop.
"That is being a little bit self-critical," Molyneux added, "but I think that there's times that you have to be self-critical. I think the worst thing that could have happened to Fable III is if it sold 4.99 million, because I think that would have made us slightly complacent, and complacency is always the worst place to be, in my opinion.
Molyneux said that Lionhead approaches development in a "very different" way now. The studio knows up front "precisely" how long a game will be and how each of the mechanics will work within it.
"So we've got a very, very different process of designing now, which means that this time around if we did have a Journey to Rule or if we did have - I'm not saying that I'm giving you any clues there - then it's going to be part of that golden thread that we're making up to the player," said Molyneux.
"We've spent a long time thinking about that and doing our research on how you can have a creatively-led production process and how you can take the complete randomness out of the way that a lot of ideas are developed and evolved."
Peter Molyneux was awarded a BAFTA Fellowship earlier this year for his outstanding contribution to world of video games. During his emotional acceptance speech Molyneux apologised for over-promising during interviews - a technique he said he fell back on to "stop journalists going to sleep".