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Lionhead in acquisition talks

Microsoft and Ubisoft linked.

Sources close to British developer Lionhead Studios have revealed to GamesIndustry.biz that the company behind Fable and Black & White is in acquisition talks once more, with two key publishers fingered as the likely suitors for the firm.

Platform holder Microsoft and French publisher Ubisoft are said to be the two companies most interested in Lionhead, while a source at Electronic Arts ruled out the possibility that the market leader might be in the running to acquire the studio.

Of the two, Microsoft has the most history with the studio - the software giant published one of Lionhead's most successful titles to date, Fable, and is believed to be working with the firm on a next-generation sequel to the game for Xbox 360.

Credence is also lent to Microsoft's involvement in the deal by the close relationship Lionhead boss Peter Molyneux has enjoyed with the firm and its top executives since the launch of the Xbox, with the well-known designer often appearing to sing the praises of the Xbox platform in public.

However, this isn't the first time that such talks have been entered into by Lionhead, with the most recent round of discussions believed to have taken place between the developer and investment firm Elevation Partners last November in the wake of Elevation's acquisition of North American developers Bioware and Pandemic.

Speaking to GamesIndustry.biz, a spokesperson for the developer refused to comment directly on the report, but confirmed that "Lionhead gets approached with regard to acquisition on a very regular basis and this has been the case since the company was founded 9 years ago."

Earlier this week, Activision announced that it would not be publishing console versions of Lionhead's latest title, The Movies, after the PC version's sales failed to live up to expectations - but the developer, which owns the IP for the title, has indicated that it will continue development both of the console versions and of an expansion pack for the PC version.