Lionhead Studios Limited was a British video game developer founded in July 1997 by Peter Molyneux, Mark Webley, Tim Rance, and Steve Jackson. The company is best known for the Black & White and Fable series. Lionhead started as a breakaway from developer Bullfrog Productions, which was also founded by Molyneux. Lionhead's first game was Black & White, a god game with elements of artificial life and strategy games. Black & White was published by Electronic Arts in 2001. Lionhead Studios is named after Webley's hamster, which died not long after the naming of the studio, as a result of which the studio was very briefly renamed to Redeye Studios.
Black & White was followed up with the release of an expansion pack named Black & White: Creature Isle. Lionhead released Fable, from satellite developer Big Blue Box. In 2005, Lionhead released The Movies and Black & White 2. Lionhead was acquired by Microsoft Studios in April 2006 due to encountering financial difficulties. Many Lionhead developers left around this time, including co-founder Jackson and several developers who left to found Media Molecule. Molyneux left Lionhead in early 2012 (shortly after the resignation of another group of developers who were dissatisfied with the company) to found 22cans because he wanted to be more creative. After Molyneux's departure, Microsoft had Lionhead switch to developing games as a service games. As a result, there were many changes within the studio.
In early March 2016, Microsoft announced that it had proposed closing Lionhead Studios and that the planned game Fable Legends would be cancelled. Lionhead was closed down almost two months later, on 29 April. A few months after Lionhead's closure, two key people (Webley and Gary Carr, who was Lionhead's creative director), founded Two Point Studios.
Peter Molyneux founded Bullfrog Productions in 1987, which was later acquired by Electronic Arts (EA) in 1995. Around 1996, Molyneux had contemplated leaving Bullfrog, as he felt limited in his creative freedom under Electronic Arts. He along with Lionhead's eventual co-founders, Mark Webley, Tim Rance and Steve Jackson, started developing plans for a new studio. In 1997, due to a series of events and from issues arising between Molyneux and Electronic Arts, he ultimately left the company in July 1997, co-founding Lionhead shortly after that, along with Mark Webley, Tim Rance, and Steve Jackson (who co-founded Games Workshop and co-authored the Fighting Fantasy series).
On his recruitment, Jackson said "It was an offer I couldn't refuse", as he wanted to get back to making games instead of writing about them (Jackson had interviewed Molyneux about Bullfrog and Dungeon Keeper, but for much of it, they discussed German board games instead. This led to them meeting frequently for an event called "Games Night"). Molyneux assured him that his lack of programming knowledge was an asset rather than a problem. Lionhead is the second Bullfrog break-off group, after Mucky Foot Productions (founded in February 1997). According to Glenn Corpes (who co-founded another: Lost Toys), Lionhead was Molyneux's "take on what Bullfrog used was".