Microsoft has announced a major investment in first-party video game development.

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It has bought Forza Horizon developer Playground Games, Hellblade developer Ninja Theory, State of Decay developer Undead Labs and We Happy Few developer Compulsion Games.

Xbox boss Phil Spencer also announced a new Microsoft Studios developer called The Initiative. This Santa Monica-based outfit is headed up by ex-Tomb Raider boss Darrell Gallagher.

Spencer stopped short of confirming Eurogamer's report that Playground is working on a new Fable, but did say the studio was hard at work on its open world adventure game.

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Wesley Yin-Poole

Wesley Yin-Poole

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Wesley is Eurogamer's deputy editor. He likes news, interviews, and more news. He also likes Street Fighter more than anyone can get him to shut up about it.

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