Lionhead Studios have become the latest British developer to become part of the Microsoft Game Studios... Details inside.

UK-based developer Lionhead has been sold to Microsoft for an undisclosed amount of money, it was revealed today. The deal will secure exclusive titles from the developer for the Xbox 360, and also for the upcoming Microsoft PC operating system Windows Vista.

The deal has long been rumoured after PC titles Black & White 2 and The Movies underperformed commercially, with the latter having console versions cancelled as a consequence. No games were revealed to be in development under the deal, though a sequel to the multi-million selling Fable - developed by Microsoft and Lionhead together for the original Xbox is a safe bet.

"We could not be more excited about being part of MGS," Lionhead boss Peter Molyneux gushed in a statement today. "They have long supported our creative vision, and this teamwork resulted in the hugely successful 'Fable' franchise. This acquisition gives Lionhead the stability and opportunity to focus on creating world-class next generation titles. We are joining some of the most incredible studios in the industry, the combined talent of which will truly take next generation gaming to a new level."

Meanwhile, Microsoft Game Studios boss Shane Kim said that "Peter Molyneux is one of the few true visionaries in our industry, and joining us is incredibly important to the future of both interactive entertainment and MGS. Lionhead is a shining example of the innovative and creative talent that has delivered some of the most impactful and unique games experiences to date, and I am honored to welcome Peter and the incredible people at Lionhead Studios."

Lionhead of course joins Rare as the second British developer snapped up by the company in recent years.